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Southwest Energy Efficiency Project Southwest Energy Efficiency Project

Low-Interest Loan Program

For many facilities, one of the greatest challenges to improving energy efficiency is obtaining capital for new energy projects. Some companies are able to provide capital for energy efficiency projects with simple payback periods of 5 years or less (roughly equivalent to requiring a return on investment of at least 20%). Many others require a simple payback period of about 2 years, or have difficulties obtaining the capital for all the projects that meet their normal financial threshold.

The Colorado Governor's Energy Office (GEO) has developed a low-interest loan program that is ideal for financing energy efficiency projects with payback periods longer than 2 years. Under this program, loans up to $3 million are available to commercial and industrial companies for terms up to 10 years. The average rates will be about 5%, which is 1-3 percentage points lower than the current market rate for other business loans.

For loans for energy efficiency projects greater than $100,000, companies submit their applications through GEO, and the loans are administered through the Colorado Housing and Finance Authority (CHFA). Approval criteria include: a) the strength of the proposed project(s), and b) the financial health of the company applying for the loan. For loans smaller than $100,000, companies apply directly to one of the GEO approved banks, letting the bank know that the loan is for an energy efficiency project through the GEO program.

For any questions about the loan program, please contact Paul Scharfenberger at GEO: Paul.Scharfenberger@state.co.us.