Tamarind Phinisee | Jun 10, 2011, 5:00am CDT
ACCIÓN Texas-Louisiana has launched a new green fund initiative in partnership with CPS Energy.
As part of the partnership, CPS Energy has agreed to invest up to $1 million in the new ACCIÓN fund — $550,000 of which, at a minimum, is to be used for making loans to small businesses involved in green/sustainability projects.
The maximum amount of money available to San Antonio businesses applying for loans from the fund is $250,000.
The revolving-loan fund will be used to make loans to existing or start-up small businesses that incorporate environmental responsibility in business operations by reducing energy demands or costs; using renewable energy; improving energy efficiency for any building, home or other facility; or use emerging technology that reduces the negative effects on the environment.
Businesses will also qualify if they can deliver a product or provide a service associated with or related to energy efficiency, renewable energy, and smart grid solutions.
The balance of the loan fund not reserved for “green” loans will be available to qualifying startup and established small companies seeking capital for expansion, equipment purchases or other legitimate business needs.
“This is a great public/private partnership with CPS … and we see this as a great first step,” says Janie Barrera, president and CEO of ACCIÓN.
“It’s wonderful to have these funds going directly to green initiatives and green small businesses,” she adds. “And we see it as a great beginning and are hoping that others will join the efforts of investing and donating to ACCIÓN to continue the work that we do in the small business community here in San Antonio.”
Barrera says she hopes CPS’ investment will serve as a model partnership that her organization can duplicate with other entities throughout Texas and Louisiana.
Paula Gold-Williams, chief financial officer and executive vice president for CPS Energy, says the city owned utility sees the new green fund as an extension of its own efforts to give back to the community.
“ACCIÓN is a proven lender in the microlending space and (it has) a proven record of being very prudent but innovative in trying to help the community,” Gold-Williams says. “Both parties are excited about it and we look forward to helping them cast a wider net … .”
Greater objectives
Gold-Williams says the money being invested by CPS is drawn from the utility’s Retail Energy Assistance Program (REAP) trust fund that was established in 2002.
REAP is a residential program used to provide financial assistance to families in need of help to pay their utility bills.
Apart from the money CPS gives to the program, the REAP fund got a boost in March of last year when CPS settled litigation allowing the utility to reduce its stake in a planned expansion of the South Texas nuclear power plant.
As part of the settlement, $2.5 million is to be directed to the REAP fund each year for four years.
Making this investment in ACCIÓN, Gold-Williams says, allows CPS to use the money to help more people — in this instance small businesses — while at the same time earning a return on its investment, which will be directed back to the REAP.
Barrera says the investment allows both CPS and ACCIÓN to meet the city’s larger green initiative goals.
“So, it’s as win-win situation for both entities,” Barrera says.
Furthermore, says Brandon Seale, the funding will also help local small businesses stay in step with the city’s sustainability objectives.
Seale is as an ACCIÓN Texas-Louisiana board member, as well as an appointee to the San Antonio Mayor’s Green Jobs Leadership Council, and a donor to the new green fund.
“Green businesses by their very nature are struggling to make viable certain products and services whose value proposition is not self-evident,” Seale says.
“If we want the benefits of green industry to accrue locally,” he adds, “we must make capital available to those small businesses that have proven experience in the field or else the local green scene will be populated by companies from elsewhere that do not share our values or share our commitment to our community.”
