CDPQ and Nuveen Green Capital (NGC) have announced the establishment of a $600 million financing program for sustainable real estate investments. The program will combine senior and Commercial Property Assessed Clean Energy (C-PACE) financing, which enables property owners to finance the upfront cost for qualified energy, water, resilience, and public benefit projects.

The program will support energy efficiency, water conservation, renewable energy and resiliency improvements tied to new or existing commercial real estate (CRE) developments, with the aim of reducing the environmental impact and improving sustainability of the built environment. The intent is to provide a single-source program that will provide substantial flexible, committed, and discretionary capital for new large-scale construction and bridge financings across key asset classes and markets, the program’s sponsors said.

C-PACE is a financing mechanism aimed at enabling building owners and developers to obtain low-cost, long-term financing for projects supporting energy efficiency, water conservation and renewable energy projects, including renovations, new construction and acquisitions, with the financing secured by property assessments, tying the debt to the property instead of the owner. According to the U.S. Department of Energy, the C-PACE structure addresses a key potential disincentive to investing in energy improvements if property owners are concerned that they may not stay in the property long enough for the project’s savings to cover the initial costs.

Marc Cormier, Executive Vice-President and Head of Fixed Income at CDPQ, said:

“Developing greener buildings and reducing the carbon footprint of our built environment can create significant value. Through this distinctive financing program, we are able to accelerate the implementation of environmentally sound measures for commercial real estate owners and developers.”

Jessica Bailey, President and CEO of Nuveen Green Capital, added:

“CDPQ’s strong commitment to sustainability and track record of innovation align very well with our mission. This program represents another exciting milestone for the C‑PACE industry and Nuveen Green Capital. We are thrilled to be working with CDPQ to build this one-stop shop for bridge and construction loans to meet the growing need for commercial real estate financing.”