Climate Loan Participation

IBank Climate Loan Participations allow IBank to lend alongside eligible lenders (Lead Lenders) who make green loans in order to expand climate lending in California. Loan participations encourage community lenders, credit unions, and other private investors to fund climate projects.

IBank will lend up to 50% of the amount of a loan, with IBank’s proportionate share targeting from $10 million to $40 million, with a maximum of $100 million for particularly high-impact, creditworthy opportunities. Loan tenor is not to exceed the useful life of the project being financed, up to a maximum of 30 years. In underserved communities, IBank may increase its level of participation up to 60% percent and/or may offer a reduced interest rate on its share of the loan resulting in a lower, blended interest rate for the borrower.

Eligibility and How to Apply

Loan Eligibility: Eligible loans include term loans for purposes including, but not limited to, predevelopment, land acquisition, construction, working capital, equipment, materials, facilities, startup costs, and inventory. IBank Loan Participations can work with either new or existing loans. For existing loans, IBank prioritizes “financial additionally” — meaning the participation should enable the originating lender to deploy additional capital to the borrower. Projects must be located in California.

The project, activity, or technology financed must comply with Federal Cross-Cutting Requirements and meet the Six-Factor Eligibility Criteria.

Lender Eligibility

The following types of lenders are eligible to become Lead Lenders under the Loan Participation program:

Federal or state-chartered banks
Savings associations
Certified Community Development Financial Institutions (CDFIs)
Credit unions
Farm Credit System Insurance Corporation (FCSICs)
Other financial institutions, with IBank exception

Lenders can enroll to use IBank’s Loan Participation program on an ongoing basis.

View more about lender eligibility

Loan Participation Process

Intake Process and Screening: Lead Lenders submit loans to IBank for a loan participation via the Climate Catalyst Program’s Intake Form. Developers and borrowers may submit a project for consideration — it is recommended that a third-party lender is engaged prior to submission.
If a lender is pursuing a reduced interest rate in support of investments to underserved communities, IBank must be involved at loan origination.
Submission for Formal Consideration: After review, IBank may invite lenders to submit their project through a Climate Loan Participations Request for Proposals that is being developed. When finalized, the open Request for Proposals (RFP) will provide additional terms and details, including instructions for application. Projects are accepted on a rolling basis.
Review: The Lead Lender conducts origination, underwriting, closing, and servicing of the loan. IBank implements its own due diligence review of the Lead Lender’s underwriting prior to participating in the loan.

Please note:

Loan Participations constitute a proportionate share of the loan and associated fees but are not considered an extension of credit to the Lead Lender.
IBank will participate pari passu with the Lead Lender on terms and economics. Even in the case of a reduced interest rate, IBank will remain pari passu with respect to any other loan terms.

Frequently Asked Questions

IBank Climate Financing

Q: I am a borrower seeking a loan. How do I secure a loan with an IBank Loan Participation?

A: Lenders initiate the process; however, coordination between the borrower, lender, and IBank minimizes issues in executing the transaction. Borrowers seeking loans for qualified projects or working capital can reach out to their preferred lender and begin an underwriting process with that lender. IBank recommends noting potential loan participations when completing the Climate Catalyst Intake Form.

Q: What interest rates does IBank offer?

A: Since IBank is participating alongside a Lead Lender, the terms of the loan, including interest rates, will be set by the Lead Lender.

Q: Is there a minimum capital commitment from the Lead Lender?

A: Yes. The Lead Lender must have its own capital contribution of at least 20% of the loan amount and have firm commitments for the remaining balance. The Lead Lender must retain at least 20% of the loan amount and continue to service the loan for the duration of IBank’s participation. This ensures that IBank has a consistent point of contact in the event of default. IBank reserves the right to sell or assign its loan position.

Q: What collateral is acceptable for an IBank Loan Participation?

A: The Lead Lender must apply the same standard of care for collateral and security interest as they do in the ordinary course of business.

Q: Does an IBank Participation have to be senior debt?

A: IBank will participate pari passu with the Lead Lender on terms and economics. Loans may be senior or subordinate to other debt, provided that IBank’s position remains pari passu within the loan. If subsequent financing is to be more senior than the Participation Loan, IBank requires consent rights/right of first refusal.

Q: What fees and penalties are associated with IBank’s Loan Participation?

A: The Lead Lender will implement all eligible fees and charges according to its loan policies, including application fees, closing fees, annual fees, servicing fees, and penalties, with an appropriate pro rata share accruing to IBank.