Enbridge Sustain and Blackstone Energy Services Inc. will receive $200 million from the Canada Infrastructure Bank (CIB) toward a $300-million retrofit program for Ontario's municipalities, post-secondary institutions, hospitals and multiresidential buildings.
The two firms will partner on building, constructing and providing decarbonization projects, with Blackstone serving as technical advisor and executor. The projects will be carried out under a long-term energy-as-a-service contract with customers.
Darren McIlwraith, director of product development for Enbridge Sustain, said in an interview with Sustainable Biz Canada the company approached the CIB over a year ago because of its interest in providing capital for retrofits.
“This is a customer segment that we are now slowly growing into,” McIlwraith said. “We’ve been more focused on residential and multiresidential in the first year of getting off the ground. But this was always a customer segment that we’ve wanted to address and tackle.”
The opportunity presented itself for the CIB to provide the capital, and Enbridge Sustain sought a technical service provider. It landed on Blackstone Energy Services because it already has experience in building retrofit projects.
Toronto-based Enbridge Sustain is the Ontario-focused unregulated services business side of Enbridge (ENB-T). It facilitates energy transitions by offering cleaner sources of energy.
An example of its work is a partnership with green homebuilder SEAN on a 73-unit townhome and condo community in Barrie, Ont. equipped with a geothermal system.
Its partner on the retrofit program, Blackstone Energy Services, is an energy management firm headquartered in Toronto which advises its clients on decarbonization.
McIlwraith said CIB will provide a $200-million loan toward the program, while Enbridge will contribute $100 million to create a $300-million retrofit fund.
It will prioritize retrofits for the MUSH category of buildings – municipalities, universities, schools and hospitals – sectors in which Blackstone Energy Services specializes.
The focus of the retrofits will be on energy delivery and decarbonization, including:
- the conversion from natural gas heating to a type of geothermal energy called geoexchange;
- electrifying heating;
- electric vehicle infrastructure;
- heat recovery;
- smart building controls; and
- behind-the-meter solar energy.
Once the retrofits are in place, an energy-as-a-service model will be implemented to repay the initial capital costs with long-term energy savings over a 20-year term.
To meet eligibility for a loan, a project must achieve at least a 30 per cent reduction in greenhouse gas emissions, which will be measured and verified.
A minimum project loan will likely be between $5 million to $10 million, though some may be larger, McIlwraith said.
He anticipates the capital will be spent over five years. If the program is successful based on demand and results, McIlwraith believes the CIB would consider increasing the size of the portfolio.
Enbridge Sustain could not disclose any specific customers interested in financing through the retrofit program, but said it and Blackstone Energy Services are in talks with customers to tap into the funding. McIlwraith expects projects to be announced in late 2023 or early 2024.
Including this $200-million fund, CIB programs have now exceeded over $1 billion in commitments to green retrofit financing.