Capital program: Loan or credit enhancement for local home-energy upgrade financing program
Implement or scale-up a full version of your local home-energy upgrade program. Finance your program with a loan or credit enhancement.
COMMUNITY EFFICIENCY FINANCING
Funding Snapshot
Two funding options are available:
Capital loan combined with grant
Loan to a maximum of $10 million
Grant of up to a maximum of 50% of the loan amount to support start-up and operating costs
The combined loan and grant can cover up to 80% of total eligible program costs
Credit enhancement:
Credit enhancement of $2 million pledged by GMF to support third-party financing
Applicant must demonstrate a minimum leverage ratio of 5:1 (credit enhancement to third party capital)
Grant of up to $5 million (not to exceed 50% of total eligible costs and not to exceed total start-up and operating costs)
All Canadian municipal governments; Municipal partners applying in partnership with a municipal government.
The following entities are not eligible to receive funds directly:
Homeowners
Federal government entities and any organizations established by those entities
Provincial and territorial government entities and any corporation that they own or control
Applications are accepted year round, though this offer will close when all funding has been allocated.
See the application guide for a list of eligible costs.
Update to Community Efficiency Financing (CEF) initiative criteria
As of June 30, 2023 (11:59 P.M. PT), all full applications received will be considered under updated CEF criteria. This update is for capital program applications only.
Why is this being updated?
The update has two strategic objectives:
- Balanced geographic funding: increasing uptake in provinces and territories that have not yet launched capital programs with CEF funding and the adoption of diverse funding models beyond Property Assessed Clean Energy (PACE)
- Raise the bar for innovation: supporting more diverse efficiency financing models, such as on-bill financing and direct lending programs in all regions of Canada. In addition, CEF will be prioritizing applications that underscore innovation in their program design; for example:
- targeting deeper energy retrofits
- higher GHG reductions
- deploying new capacity development activities
- new stakeholder/administration model
- resiliency and adaptations components
- and more
It does not include changes to the client application process.
The update will include Seed and Growth streams, which will not impact the application process for clients.
- Seed stream: funding for underserved jurisdictions and underrepresented program financing models, specifically utility on-bill and third-party lender financing.
- Growth stream: funding open to all other applications.
Deferral policy
The CEF update includes an application deferral policy of up to three months to prioritize the most innovative and strategic program applications if the initiative experiences oversubscription. There are no immediate plans to defer any applications and the policy will only be applied if needed.
Questions?
Contact our Outreach team who can answer any questions regarding the CEF update.
gmfinfo@fcm.ca
We offer two options to capitalize a local financing program for home-energy upgrades:
- Loan combined with grant
- Credit enhancement combined with grant
Loan combined with grant
Access a competitive-rate loan in combination with a grant to implement a local financing program for home-energy upgrades. Funding is intended to support start-up, operating and capital costs over a four-year implementation period.
- Loan details: Up to $10 million per local program provided for on-lending within the community for home-energy upgrades on private property and associated costs. Up to 30% of the approved loan amount can be used for approved non-energy improvements (e.g., water conservation, climate adaptation, alternative energy) at the individual participating home
- Grant: Up to 50% of the GMF loan amount to cover program start-up costs (e.g., legal services, procurement of IT tools, website development) and multi-year operating costs (e.g., staffing, marketing and promotions)
This option also includes a loan loss provision to mitigate the default risk of participating homeowner loans. A dedicated loss reserve is established for each program to cover any individual loan losses that might be realized. Amounts committed to the loss reserve are considered an eligible cost and funded by the grant allocation.
For full details, please read our application guide.
Credit enhancement combined with grant
A credit enhancement option is available to incentivize private investment into local financing programs for home-energy upgrades. This involves a municipality working in partnership with a third-party lender (e.g., financial institution, impact investor, or utility company) who provides or arranges capital to finance home-energy upgrades.
Applicants partnering with participating lenders can access this funding to offset the lenders’ risk by providing partial coverage for losses that may arise, while also unlocking preferential financing products for homeowners that would otherwise not be made available in the absence of the credit enhancement (e.g., below-market interest rates, extended repayment terms, or expanded underwriting criteria).
To be eligible, applicants must demonstrate that they have secured capital commitments from lenders to satisfy a minimum 5:1 leverage ratio (i.e., ratio of loan capital to credit enhancement). For example, a $1 million loss reserve pledged by FCM must mobilize at least $5 million in third-party loan capital.
For full details, please read our application guide.
Prerequisites
- A community energy, sustainability or climate action plan, or similar, that identifies energy efficiency and renewable energy in the residential sector as a priority area for action
- Evidence of having completed detailed program design work
Notes
Funding is subject to availability. We reserve the right to make changes to eligibility criteria and the types of projects funded through this offer.
How to Apply
- Review the application guide. Make sure to look at the eligibility criteria and required document sections.
- Visit the FCM funding portal to create your profile and request a PIN to access the system. Already have an FCM funding portal profile? Skip to Step 3.
- Complete the pre-application form available on the FCM funding portal.
- Submit the form to GMF following the instructions in the application guide. Applicants will receive a response within 15 business days of receipt of the initial proposal.
- Eligible projects will be invited to submit a full application.
If you are not eligible to apply, sign up for our e-newsletter to stay informed about other funding opportunities.
All applications and pre-applications must be submitted by May 23.
The FCM Funding Portal will be unavailable soon due to scheduled upgrade.
Need help to see if this is the right funding for you?
Contact our Outreach team who can answer any questions you have relating to this funding opportunity.
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