Green Condo Financing

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Green Condo Financing
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About TAF

• Our role Incubating climate solutions
• Established by City Council in 1991, TAF has
  provided 20 million in grants to the
  not-for-profit sector and City Agencies to
  accelerate the reduction of GHGs in Toronto
• Not on the Citys Tax base TAFs endowment
  revenues are used to provide grants and its
  capital may be used to invest in private entities
  up to 2 million without Council Approval (equity
  and debt)
• TAF is flexible, innovative, independent, unique

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About TowerWise

• Four focus areas including TowerWise energy
  efficiency in high-rise homes
• Residential sector responsible for gt40 of
  Torontos GHG emissions
• Addressing the financial barriers to higher
  performance buildings

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Origins of the Green Condo Loan Program

Challenge Opportunity Market gap Leverage
Energy efficient high rises cost more to
build Energy efficient buildings cost less to
operate Condo builders pay the extra costs but
dont reap the benefits Condo Corporation could
save gt100,000 per year
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Financing challenge

• Financing repayment of capital cost from expected
  future savings from reduced energy costs
  unprecedented
• Commitment today for a draw-down of funds 3 years
  or more into the future
• Condo Corporation has no track record of
  repayment (bankers dream deal!?)
• Market size 120 buildings per annum max
  likely 60 - _at_500k per small market across 6
  major institutions (that also want deposit
  business)

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But big potential benefits
Developer, residents and society all benefit in
different ways But group receiving the most
direct benefit residents takes direct
responsibility for costs
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Building it up

• Need to make this solution
• Scalable
• Catalytic
• Transformative
• Non-proprietary

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Why we need this solution

• Energy performance of a 2-year old condo can be
  easily improved by 30. Clearly there is an
  opportunity for improvements from the very start
  of construction.
• Condo sector growing rapidly as many as 50 new
  buildings a year in Toronto.

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How it works
Leveragable green dividend

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How it works

• Incremental cost financing without increasing
  prices for Green Condos
• Leverage life cycle savings that accrue to the
  Condo Corporation
• Minimize capital cost barriers for Green Condo
  construction Invest in building not in
  recurring energy costs
• Secure financing on condo building assets and
  cash flow

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Partnering with Tridel
The Lender Toronto Atmospheric Fund The
Developer Torontos leading
condo developer (1.5 million square feet
annually) Stage 1 Proof of concept loan Stage
2 Syndication of commercial product
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The Verve Case Study
The Loan 475,000 from TAF The Result LEED
Building with 35-40 energy savings Plus 900
tonnes of CO2 emissions avoided per year (gt2
tonnes per dwelling)

• Good market acceptance
• Affordable energy efficiency
• Success!

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Phase 2 Leveraging bank financing
METROGATE LEED-ND COMMUNITY
SOLARIS I II GREEN FINANCING gt1M
gt2500 tonnes GHG avoided in total
REPUBLIC CONDOMINIUMS (LEED-Silver
Candidates) LEVERAGED GREEN FINANCING
1,000,000
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And more . . .
NUVO II LEED Candidate 35 Energy
Savings LEVERAGED GREEN FINANCING 500,000
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And more . . .
GRAND TRIOMPHE II LEED Candidate 35 Energy
Savings LEVERAGED GREEN FINANCING 500,000
MONARCH CORPORATION - Red 33 Energy Savings
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The outcome so far

• Initial TAF investment with Tridel
• 1.5 million
• Current Leverage with Tridels lenders and
  potential boutique financing (20 TAF Guarantee)
• 5 million and growing
• New TAF Borrowers
• Monarch Developments
• Remington

• Other cities examining TAFs model
• New York
• Chicago
• Seattle
• Melbourne Sidney, Australia

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Stay in touch
www.toronto.ca/taf And coming in
December www.TowerWise.ca Tim Stoate
416-393-6368 tstoate_at_tafund.org