MnCIFA Call for Financing Applications for Affordable Energy Solutions and Innovative Technology Deployment

Since MnCIFA was established in state law in 2023, the MnCIFA Board of Directors has approved $37 million across 14 loans to clean energy projects in Minnesota. MnCIFA’s current loan portfolio ranges from loans for $500,000 to $5 million, with an average loan size of $2.6 million. To date, the majority of projects with MnCIFA loans are located in the Twin Cities area, in part due to the concentration of Minnesota’s population in the metro area.

As required by MnCIFA’s statute, lending prioritizes Environmental Justice Communities. (The linked tool from the Minnesota Pollution Control Agency identifies these Communities in Minnesota.) To date, about 90% of loans approved by MnCIFA’s Board serve Environmental Justice Communities. To expand geographic diversity to our lending portfolio, we are seeking loans to projects located in Tribal communities and in communities outside the Twin Cities metro area.

Applicant Track Record

All projects must be within the demonstrated competence of the proposed management, which should be demonstrated by a recent, proven record of success in the same or a closely related business as evidenced by the most recent three years of historical financial statements, demonstrating a record of revenue generation and successful business operations. 

Loan Size

MnCIFA can work with co-lenders to bring sufficient resources to larger projects and to increase the development impact of the transaction. Per MnCIFA statute, MnCIFA cannot provide loans to a single entity in an amount less than $250,000. However, MnCIFA can provide financing to a revolving loan facility or to portfolio of smaller projects that, in the aggregate, exceed the $250,000 minimum. Generally, MnCIFA loans are under $5 million.

Tenor

The loan tenor is typically between 2 and 7 years, depending on the type of project and debt servicing capability. For MnCIFA loans, it is common to allow a grace period on principal repayment at the beginning of the term; however, each transaction will be evaluated on a case-by-case basis. 

Leveraging Other Financing Sources

MnCIFA’s statute requires that the authority “leverage private investment in qualified projects, with the aim of achieving a high ratio of private to public money invested through funding mechanisms that support, enhance, and complement private lending and investment.”  MnCIFA prefers to fund projects in which the borrower brings at least 50-70% of the funding to the project through private lenders, private grants or donations, utility rebates, and other sources of private equity.  In most cases, MnCIFA would not fund a project as sole financier. 

Costs

Through our statutory authority, MnCIFA is able to offer flexible loan terms. Interest and fees will vary depending on the project. A summary of key costs is presented below. Please consult with MnCIFA for more information.

• Origination Fee: A one-time fee to be paid at the time of first disbursement.
• Interest Rate: A negotiated spread over the base cost of funds (U.S. Treasuries). MnCIFA’s spread is based on our assessment of risk and notching factors, including job creation, benefits to Environmental Justice Communities, and geographic diversity.

The estimated timeline for the loan approval process takes about 2 to 4 months, from the time an application is submitted to loan agreement, depending on the complexity of the project. 

Each application follows these steps:

• Early Review – Preliminary Application Form: MnCIFA will evaluate the proposed project and its alignment with MnCIFA’s definition of a Qualified Project.
• Early Review – Loan Application: MnCIFA will then request the project sponsor complete a comprehensive Loan Application, which includes answering Labor and Development Impact Labor Questions and providing supplemental documentation (e.g., audited financial statements, business plan, etc.).
• Due Diligence: Due diligence includes assessment of business potential, financial viability, debt service coverage, counterparty review, and a potential site visit.
• Approval:  Projects that pass MnCIFA review and approval then move to the Board of Directors. Firstly, projects will go up for review by the Board’s Credit Committee. Then, if approved, the project will go up for review and final approval by the full Board. MnCIFA funds are encumbered upon Board of Directors approval for a period of no more than one year after the loan closing date.
• Project Close: For projects with Board approval, MnCIFA and the project sponsor will then fulfill all closing documentation requirements and sign the loan agreement. Funds are disbursed to the borrower, usually in tranches.
• Monitoring: MnCIFA monitors the credit and development impact of all projects for the life of the loan.

MnCIFA’s 2026 Objectives

In 2026, MnCIFA is seeking to deploy capital to projects that align with the following objectives:

• Reduce energy costs and increase reliability for Minnesotans
• Bring clean energy innovation to Minnesota that spurs economic development
• Expand clean energy opportunities in Tribal or Greater Minnesota communities

MnCIFA is prioritizing applicants that have not previously received MnCIFA financing and for projects that meet the Objectives listed below. Not all projects are ready for debt financing and MnCIFA may at times recommend that applicants seek grants or other state funding sources. Submission of a preliminary application initiates steps for qualifying for a loan. All MnCIFA loans are subject to underwriting by the MnCIFA Investment Team and final approval by MnCIFA’s Executive Team, MnCIFA Board of Directors’ Credit Committee, and the MnCIFA Board of Directors.

Objective 1: Reduce Energy Costs and Increase Reliability for Minnesotans

MnCIFA seeks applications for projects that will deploy commercially available clean energy technologies to save consumers, companies, nonprofits, or other entities money on their energy costs.  This includes, but is not limited to: solar, storage, geothermal, energy efficiency, wind, and other commercially available technologies.

Preferred Qualifications for Projects

Under this objective, MnCIFA preferred project qualifications include:

• MnCIFA loan size between $250,000 and $2,000,000
• Financial and/or economic models that demonstrate cost savings to the end customer
• MnCIFA financing would be up to 30% of the full project capital stack
• Plan to access federal tax credits, where applicable

Objective 2: Bring Clean Energy Innovation to Minnesota that Spurs Economic Development

MnCIFA seeks projects that utilize innovative technologies and create quality jobs, such as bringing new companies and cutting-edge clean energy products to Minnesota.  MnCIFA’s participation in the project capital stack may be greater for these projects relative to the other objectives in this Call for Applications, given MnCIFA’s statutory goals to replace existing fossil-fuel-based technology with innovations which reduce carbon emissions. Emerging technologies can be more capital intensive and require patient capital that private financiers can be hesitant to provide. In this respect, MnCIFA seeks to be catalytic to other private financiers participating in the project.   

Preferred Qualifications for Projects

• MnCIFA loan size between $500,000 and $5,000,000
• MnCIFA financing would be up to 50% of the full project capital stack

Objective 3: Expand Clean Energy Opportunities in Tribal or Greater Minnesota Communities

MnCIFA seeks projects located outside of the Twin Cities metro area¹. Per MnCIFA statute, MnCIFA must “finance projects in all regions of the state.” As noted on Project Eligibility [above], MnCIFA is required by statute “to ensure that no less than 40 percent of the direct benefits of authority activities flow to Environmental Justice Communities.” To ensure that Environmental Justice Communities benefit from MnCIFA’s support and MnCIFA complies with this portfolio concentration requirement, preference will be given to projects that benefit Environmental Justice Communities. One of the Environmental Justice Community definitions is "census tracts that are located within Indian Country, which is defined as federally recognized reservations and other Indigenous lands." To date, the majority of MnCIFA’s financed projects have been in the Twin Cities metro area and no project has financed Tribal projects.

Preferred Qualifications for Projects

MnCIFA’s preferred project qualifications for this objective include those articulated under Objective 1 and Objective 2 above, in addition to being outside of the Twin Cities metro area.

Cooperative Financing

MnCIFA also seeks to mobilize private capital to accelerate the deployment of clean energy by partnering with financial institutions on projects that implement the technologies noted above.  Per MnCIFA statute, MnCIFA must “strategically prioritize the use of the authority's funds to leverage private investment in qualified projects, with the aim of achieving a high ratio of private to public money invested through funding mechanisms that support, enhance, and complement private lending and investment.”

Preferred Qualifications for Co-Financed Projects

MnCIFA’s preferred qualifications for co-financed projects include those noted above in the Preferred Qualification for Projects sections of each objective, with preference for financial institutions that could:

• Provide the majority of the debt financing in the project capital stack
• Be pari passu with MnCIFA