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A state or local government typically conducts a competitive procurement procedure to award loan loss reserve (LLR) funds to a financial institution partner. The request for proposals (RFP) typically covers:
- Program background, goals, program partners and their roles over the full project cycle, the target borrower market, types of energy efficiency or renewable energy projects, economics of the projects, clean energy investment and lending volume targets, and loan marketing
- Proposed structure and terms of the residential energy efficiency/renewable energy loans, including eligible borrowers, eligible projects, expected tenors, underwriting guidelines, and proposed loan terms
- Proposed structure of the LLR, including the indicative risk-sharing formula and preliminary terms of the LLR agreement
- Prescribed format and content for financial institution proposals in response to the RFP, outlining all of the information needed from the financial institution regarding its loan terms, preferred LRF structure and risk-sharing formula, loan underwriting guidelines, loan marketing capacity, staff, and qualifications.
- Description of the RFP rules, processes, and schedule that will lead to the selection of financial institution partner(s) and execution of the implementing LLR agreement.
Download the Clean Energy Finance Guide to Residential and Commercial Building Improvements' Sample RFP for Financial Institutions for an example of an RFP.