PROVIDENCE, R.I. – A Rhode Island agency is trying to reshape the infrastructure mindset within the state while boosting its energy economy.

"People are rethinking infrastructure as a strategic, economic development tool," Rhode Island Infrastructure Bank Executive Director Jeffrey Diehl said during an interview at the agency's headquarters in the Foundry Building.

The conduit issuer supports and finances investments in Rhode Island's infrastructure through tax-exempt, triple-A-rated bonds, the proceeds of which provide low-cost financing to Rhode Island's municipalities and sewer and water utilities for a variety of projects.


It also manages investment programs for local roads and bridges, energy efficiency and renewable energy, and brownfield remediation.

In June 2015, Gov. Gina Raimondo and the state General Assembly enacted legislation that rebranded the Rhode Island Clean Water Agency as the RIIB. The law also expanded the agency's mission to include financing programs for clean energy and energy efficiency projects in the commercial, residential and municipal sectors and for brownfield remediation.

The predecessor agency's triple-A ratings helped provide a running start.

"The agency had been quite successful," said Diehl. "We also had a fairly organized and successful transformation over the last 12 to 18 months. Gov. Raimondo and Treasurer [Seth] Magaziner really had the correct vision."

According to municipal finance expert James Spiotto, agencies such as RIIB are essential amid uncertainty over infrastructure funding levels, notably from Washington.

"People have been forgetting to put hard dollars into infrastructure," said Spiotto, a managing director at Chapman Strategic Advisors in Chicago. "These projects provide jobs for younger people, especially at the lower-skilled level."

Spiotto said every hard dollar spent on infrastructure generates $3.20 in economic benefits over 20 years, "most of it front-loaded."

Across all programs during fiscal 2016, RIIB provided $209 million in project finance to municipalities, water and sewer utilities and quasi-state agencies. That created or supported more than 5,600 jobs, according to the agency.

The financing represented a 269.4% increase above $56.6 million the previous year.

Since the Clean Water Agency's beginning in 1989, the agency has put nearly $2 billion into infrastructure projects statewide.

"We're converting from being program centric to being customer-centric," said Diehl, a three-decade veteran in banking, capital market strategy and public-sector finance. That includes generating capital through multiple programs.

Most recently, Diehl was a managing partner at consulting firm Strategic Sovereign Advisors. At London-based HSBC, Diehl vice chairman of the U.S. public sector, global head of public sector banking and global head of public sector capital markets.

Outreach, said Diehl, includes counseling localities on alternatives to 20-year bonds. The agency, he said, intends to work with officials in Central Falls. The city of 19,000 emerged from bankruptcy five years ago and in March received a three-notch general obligation bond rating upgrade to investment grade BBB from S&P Global Ratings.

In fiscal 2016, the agency refunded five debt issuances that provided municipal borrowers with a combined $15.3 million in savings. Narragansett Bay Commission and 19 communities saved $5.5 million through a clean water series. The Pawtucket Water Supply Board received an additional $9.8 million in cash flow savings through a refinancing of conduit issue series bonds.

During 2016, a new efficient building fund provided $17.2 million in financing for energy efficiency upgrades to six communities.

According to Magaziner, projects approved in 2016 are expected to create or support more than 250 jobs and ultimately save local taxpayers more than $20 million in energy costs.

RIIB also executed three deals labeled as environmental, or green bonds.

According to Diehl, the heating repairs project at Edgewood Highland School in Cranston was especially satisfying.

A $2.2 million low-interest loan from RIIB enabled the public elementary school, which opened in the 1960s, to upgrade its outdated, uneven heating and air conditioning system with new boilers, thermostats and other equipment.

"Cranston had an issue to deal with," said Diehl. "We now have a learning environment there that's comfortable. Yes, now you can hear the teacher."

Also in 2016, RIIB unveiled its commercial property assessed clean energy, or C-Pace program. "It's a powerful tool," said Diehl. "It drives investment, all kinds of jobs. It's good for the economy and good for the environment."

In mid-March, the agency announced financing for the first two C-Pace projects. They call for the installation of roof-mounted solar panels on two office buildings in Middletown owned by financial services firm Embrace Home Loans.

Combined, the projects will save the firm an estimated $226,000 in energy costs across the 20-year financing term, said the agency. The total investment in the energy savings projects is $1.2 million.

Projects eligible for C-Pace financing include energy efficiency upgrades such as lighting, insulation, heating, and cooling systems and renewable energy projects. The first two projects also received grant approval from Rhode Island Commerce Corp.'s renewable energy fund.

"This is a great example of how two government programs can work together to ensure the best value for the property owner," said Diehl.

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