By Mo Schriner

Minnesota cities now have access to a new source of capital for financing clean energy projects: the Minnesota Climate Innovation Finance Authority (MnCIFA).

MnCIFA was established as a state agency in 2023 and approved its first loan in 2024. Our lending is helping fill a gap in community investment needs. In our short history, the MnCIFA Board of Directors has already approved more than $37 million in loans — ranging from $250,000 to $5 million — for projects involving geothermal, solar, energy storage, energy efficiency, innovative clean energy technology, and more.

While our agency is new, clean energy financing is not. Most states have financing entities commonly referred to as green banks, and MnCIFA is a member of, and benefits from, the U.S. Green Bank 50 network (usgreenbanks.org).

When Minnesota lawmakers passed the Next Generation Energy Act in 2007 to promote energy efficiency and renewable energy, they proposed various financing tools to incentivize clean energy investments. After considering multiple versions of MnCIFA over two decades, lawmakers established the financing authority in 2023.

Reducing energy costs and growing the clean energy economy

MnCIFA’s statute drives our mission:

• We benefit Minnesota communities by financing projects that reduce energy costs and save money, help communities prepare for more extreme weather, and grow Minnesota’s clean energy economy.
• We emphasize financing for historically underserved communities that are most impacted by Minnesota’s changing climate.
• We offer loans with flexible interest rates and terms, with a $250,000 minimum. For projects under $250,000, we partner with intermediaries for revolving or portfolio loans.
• We leverage private and public capital. For every $1 in MnCIFA loans, another $5 to $6 has been invested in projects.

Examples of funded projects

Each project MnCIFA has financed to date has involved unique financing circumstances. Examples include:

• A solar and energy storage resiliency hub: This $1.2 million loan to Renewable Energy Partners financed solar and energy storage systems at four public school buildings in north Minneapolis. The renewable energy systems are reducing the schools’ energy costs, and in the event of an outage the buildings’ power stays on so the community has a place to plug in.
• Sandstone school workforce housing: This $17 million project involved renovating the former Sandstone High School into 32 affordable apartments. MnCIFA’s $3.62 million loan financed highly energy efficient HVAC systems, windows, and roofing. Most of the loan is being repaid through federal and state historic preservation tax credits.
• Greater Minnesota Housing Fund (GMHF) support: MnCIFA’s $4 million revolving loan allows GMHF to institutionalize green lending as a standard practice for housing projects it finances. The first project included affordable apartments in Minneapolis with a Native American community clinic on the ground floor. MnCIFA financing supported the building’s geothermal and solar energy systems.

Learn more about projects MnCIFA has supported at mncifa.mn.gov/projects.

Projects cities may want to consider

Earlier this year, MnCIFA issued its 2026 Call for Applications to expand lending opportunities in Greater Minnesota and tribal communities. We plan to reopen the call later this year. We also accept applications on a rolling basis.

Among the clean energy financing opportunities for cities to consider:

• Bridge loans: For projects that qualify for federal or state tax credits, a bridge loan from MnCIFA could help cover upfront costs until credits or rebates are received. Federal tax credits remain available for geothermal, energy storage, and clean energy manufacturing projects.
• Water and wastewater facilities: One of MnCIFA’s statutory roles is financing projects that protect Minnesota waters, including municipal water and wastewater facilities.
• Geothermal projects: A growing number of cities are conducting geothermal feasibility studies, and MnCIFA financing could help offset a portion of system costs.
• Resiliency hubs: Solar and energy storage systems are becoming increasingly important as Minnesota communities experience more extreme weather events.

How the lending process works

MnCIFA’s application process begins with a preliminary form describing the project and planned financing. If a project fits MnCIFA’s lending guidelines, we may request a full application and conduct a detailed due diligence process. The MnCIFA Board of Directors reviews and approves all loans. Learn more about the steps to apply at mncifa.mn.gov/steps-apply.

For technical assistance, the League of Minnesota Cities offers cities grants of up to $5,000 to help support development of these types of projects through its Grant Navigator program. Funds are limited, so apply today. Learn more at lmc.org/grantnavigator.

MnCIFA encourages cities to apply. We are eager to co-fund projects with cities, organizations, and companies in your community: mncifa.mn.gov.

Mo Schriner, communications and engagement director, MnCIFA: [email protected].