Green Condo FinancingGreen Condo Financing

• 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 City’s Tax base – TAF’s 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

About TAF

About TowerWise

• Four focus areas including TowerWise – energy efficiency in high-rise homes

• Residential sector responsible for >40% of Toronto’s GHG emissions

• Addressing the financial barriers to higher performance buildings

Origins of the Green Condo Loan ProgramOrigins 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 don’t reap the benefits

Condo Corporation could save >$100,000 per year

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 (banker’s dream deal!)

• Market size – 120 buildings per annum max – likely 60 - @$500k per – small market across 6 major institutions (that also want deposit business)

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

Building it up

Need to make this solution:

•Scalable

•Catalytic

•Transformative

•Non-proprietary

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.

How it worksHow it works

$0

$144,000

$0

$500,000

$1,000,000

$1,500,000

Conventional Condo Efficient Condo

Other Gas & Electricity Savings

Leveragable green dividend

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

Partnering with Tridel

The Lender: Toronto Atmospheric Fund

The Developer: Toronto’s leading condo developer (1.5 million square feet annually)

Stage 1: Proof of concept loan

Stage 2: Syndication of commercial product

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 (>2 tonnes per dwelling)

•Good market acceptance

•Affordable energy efficiency

•Success!

Phase 2: Leveraging bank financing

METROGATE LEED-ND COMMUNITY

SOLARIS I & II GREEN FINANCING: >$1M

REPUBLIC CONDOMINIUMS (LEED-Silver Candidates)LEVERAGED GREEN FINANCING: $1,000,000

>2500 tonnes GHG avoided in total

And more . . .

NUVO IILEED Candidate35% Energy Savings

LEVERAGED GREEN FINANCING: $500,000

And more . . .

GRAND TRIOMPHE IILEED Candidate35% Energy Savings

LEVERAGED GREEN FINANCING: $500,000

MONARCH CORPORATION - Red33% Energy Savings

The outcome so far

Initial TAF investment with Tridel:• $1.5 million

Current Leverage with Tridel’s lenders and potential boutique financing (20% TAF Guarantee)

• $5 million and growing

New TAF Borrowers:

•Monarch Developments

•Remington

Other cities examining TAF’s model:

•New York

•Chicago

•Seattle

•Melbourne & Sidney, Australia

Stay in touch

www.toronto.ca/tafAnd coming in December:

www.TowerWise.ca

Tim Stoate – 416-393-6368

tstoate@tafund.org