The Minnesota Climate Innovation Finance Authority (MnCIFA) Board of Directors on March 26 unanimously approved a $4.7 million loan, the first for MnCIFA, which will fund the initial phase of an innovative clean energy system and help The Heights redevelopment to meet its 100% carbon-free goal. 

The loan will be used to construct the infrastructure of a geothermal energy system, which is a renewable energy resource that circulates water to heat and cool buildings. The system will be coupled with renewable electricity sources, solar, that will produce the electricity needed for operations. The system will replace the need for natural gas, or any other fossil fuel, to heat and cool the buildings.  

“We are excited to move this project forward to creating homes that are healthy, safe, energy efficiently and powered by clean energy. It is a model for Minnesota’s clean energy future,” said Commerce Commissioner Grace Arnold. “This first MnCIFA loan demonstrates the value of innovative financing for clean energy that serves communities that have been historically the most harmed by Minnesota’s changing climate.”  

Peter Klein, MnCIFA Executive Director, said, “The Heights’ renewable energy system is a prime example of where public financing is crucial to fill the gaps that exist with traditional financing.  Once the multi-family housing and lite-industrial buildings are constructed, the development agreement requires the buildings to be hooked up to the energy system.  At that point, the private sector will be willing to step in and fund the system.”  

The Heights, formerly the site of Hillcrest Golf Course, is a 112-acre site being developed for over 1,000 units of affordable housing and one million square feet of lite industrial space.  The industries locating there will provide over 1,000 livable wage jobs.  The Heights has specific environmental justice goals, including being a carbon-free community. In addition to MnCIFA’s loan, The Heights has secured funding from Ramsey County and the City of St. Paul. The construction developer for The Heights is the Saint Paul Port Authority.  

In a letter of support to MnCIFA for the loan, St. Paul Mayor Melvin Carter wrote, “An investment in this system fits precisely within Minnesota Climate Innovations Finance Authority’s purpose to use public dollars to leverage private investment by reducing the perceived risk, pooling projects to create investable opportunities, and demonstrating the performance of clean energy projects in our market.”  

During the 2023 Session, the Minnesota Legislature passed bills that created and funded MnCIFA, which is structured as a publicly accountable financing authority, commonly known in other states as a “green bank.”  

MnCIFA is currently incubating within Commerce’s Energy Resources Division but is in the process of establishing itself as an independent authority with its own Board of Directors. In addition to accelerating clean energy projects, MnCIFA aims to expand access to untapped markets and bring benefits to historically underserved communities. Based on state law, MnCIFA must ensure at least 40 percent of the direct benefits of authority activities flow to environmental justice communities, which are typically determined by their US census ethnic and income level characteristics.  The Heights meets the definition of an environmental justice community. 

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MEDIA CONTACT:
Mo Schriner, Director of Communications  
Minnesota Department of Commerce 
mo.schriner@state.mn.us