HARRISBURG, Pa., March 7, 2013 (GLOBE NEWSWIRE) -- The Pennsylvania Treasury recently sold several thousand loans made through its nationally recognized Keystone Home Energy Loan Program, according to State Treasurer Rob McCord. The sale, one of the first of its kind in the country, also marked an important milestone in national efforts to develop a secondary market for such loans.
A secondary market is seen by many industry experts as a critical step in making low-cost capital readily available to finance greater residential energy conservation improvements by homeowners across the country.
"Keystone HELP has been a great success for the Treasury and for Pennsylvania homeowners who have improved their homes and their quality of life while saving money," Treasurer McCord said. "This sale reflects the soundness and high-performing nature of these loans, and it offers a possible model for how the private sector can invest in energy-saving industry."
Treasury sold almost 4,700 Keystone HELP loans, receiving $23 million in cash and $8.3 million in deferred payments, for a projected total of $31.3 million. A consortium of three banks – Fox Chase Bank, WSFS Bank, and National Penn Bank – provided the cash component of the sale.
"There is enormous potential for growth in the residential energy efficiency space," said Treasurer McCord, "but public sector investors like our state Treasury cannot meet that demand alone. This sale is part of our innovative work to engage the private sector -- and increase access to low-cost capital for this type of money-saving, job-creating investment."
Through Keystone HELP, Treasury makes low-interest loans available for high-efficiency furnace or boiler replacements, geothermal heating and cooling units, insulation installations, door and window replacements, and other measures to help Pennsylvanians conserve energy while saving on their residential energy bills.
National energy leaders concurred that Pennsylvania's sale of aggregated debt instruments for residential energy efficiency upgrades can serve as a prototype and provide potentially valuable information about how secondary market investors might approach future deals.
"Innovative clean energy and energy efficiency financing programs, like the one in Pennsylvania, are helping to make it easier for families and businesses nationwide to save money by saving energy," said U.S. Assistant Secretary for Energy Efficiency and Renewable Energy David Danielson. "States like Pennsylvania are leading by example – moving the energy efficiency industry a step closer to accessing capital markets and helping to position the United States to lead the global clean energy race."
Ceres president Mindy Lubber, whose sustainability advocacy organization coordinates the Investor Network on Climate Risk (INCR), added, "Today's announcement is a promising breakthrough in the quest to find scalable solutions for energy efficiency investments nationally and even globally. INCR has previously recognized State Treasurer Rob McCord as a leader for his support of energy efficiency financing, and we are excited to see his continued leadership by developing tools for the secondary market that can help us realize the enormous opportunities in this efficiency space."
"The sale of the Pennsylvania HELP portfolio is an important step in creating a secondary market for residential energy efficiency loans. The PA program is clearly an exemplary model for other states to follow in developing loans to help increase the energy efficiency of homes," said Mark Wolfe, executive director of the Energy Programs Consortium, which is a joint venture of several national organizations representing state officials or agencies involved in energy-related matters.
In 2006, Treasury launched Keystone HELP statewide, building on an earlier version of the program established by AFC First Financial Corp. and the West Penn Power Sustainable Energy Fund. Since then, the program has made almost 11,000 loans for more than $75 million. Allentown-based AFC First originates and services the loans, and it utilizes a network of more than 1,700 approved in-state contractors and heating/air conditioning firms to complete the work. The demand for home improvement work creates jobs in Pennsylvania and Keystone HELP's high contractor standards encourage contractors and their employees to acquire new skills in home energy efficiency.
The Keystone HELP loans benefit from support provided by the Pennsylvania Department of Environmental Protection. Federal stimulus funds made available by the U.S. Department of Energy to DEP enable HELP loans to be offered to borrowers at lower interest rates.
Pennsylvania Treasury's efforts were supported by a grant from the Rockefeller Foundation, which provided funding for its exploration of the potential for a sale of the HELP loans to secondary market investors.
Media contact: Gary Tuma, 717-787-2465 or email@example.com
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