CHICAGO — The Chicago Infrastructure Trust received responses from 13 financial firms or groups in its first solicitation of private market interest in funding up to $100 million of energy efficiency upgrades to city facilities and schools.
The trust's staff, its advisors, and city finance officials and their advisors are reviewing the proposals submitted during a request for qualifications process launched earlier this year to decide whether to advance to the next step of issuing a formal request for proposals.
If a financing comes to fruition as city officials hope, it would mark the first undertaking by the trust, created last year by Mayor Rahm Emanuel to tap private investment in the funding of infrastructure development while preserving the city's stretched bonding capacity for traditional infrastructure.
The proposed financing would provide funding for energy upgrade projects if the trust decides to proceed. Although a deadline of March 6 was attached to the RFQ, the trust stressed that firms can still submit their qualifications as the review process continues. "The good news is we got a significant response," trust board chairman James Bell said Wednesday during a board meeting.
The 13 responses came from North South Capital; Energy Infrastructure Partners/Wells Fargo; PNC; Hapoalim Securities/CapX Partners; JPMorgan; Green Campus Partners; Johnson Controls; RW Baird; Harvestons Securities; Metrus Energy; Citi; US Bancorp; and Amalgamated Bank.
Trust officials did not disclose any additional information about the responses or terms under consideration, citing the early stages of discussions and confidentiality requirements.
The RFQ sought responses from any parties, including investors, energy savings consultants, and retrofit contractors interested in providing financing for projects planned under Retrofit Chicago.
The aim of the RFQ process was to identify a pool of potential financial partners. The questions sought to gauge the interest of banks, pension funds, union-friendly investors, and community reinvestment act funds.
The RFQ described the trust and proposed projects, outlined policies and financial objectives, and required compliance with city economic disclosure rules, and included a preliminary term sheet.
The city hopes to finance more than $200 million of projects in a series of transactions beginning this year with a first tranche of up to $100 million and then on an as-needed basis. The goal is to achieve 20% in energy savings through reduced utility and maintenance costs. The savings or some portion of them would go to repay private investors. The pledged source of repayment likely would be limited to the energy savings and some operating and maintenance savings.
The city entities would continue to own, operate, and maintain the assets and the financing and actual work would be completed by separate entities.
When Emanuel first unveiled plans for the trust last year, it was announced that the city had nonbinding agreements from Citibank NA, Citi Infrastructure Investors, Macquarie Infrastructure and Real Assets Inc., JPMorgan Asset Management Infrastructure Group and Ullico to consider investing up to $1.7 billion.
The meeting Wednesday marked the first for the trust's new executive director — Stephen S. Beitler, the founder and managing director at a Chicago area private equity investment and advisory company — who was hired by the trust board earlier this year.
