Rhode Island Code of Regulations
Title 830 - Infrastructure Bank
Chapter 10 - Programs
Subchapter 05 - Energy
Part 1 - Efficient Buildings Fund Policies and Procedures
Section 830-RICR-10-05-1.6 - Terms and Conditions

Universal Citation: 830 RI Code of Rules 10 05 1.6

Current through September 18, 2024

A. Interest/Pricing: Financial assistance may include below market interest rates, interest rate subsidies or other credit enhancements which reduce the cost of financing eligible projects. The amount of additional subsidy, if any, shall be determined by the Bank. At the discretion of the Bank, financially distressed Borrowers may receive financial assistance with a higher amount of additional subsidy as long as the terms of the financial assistance do not have an adverse effect on other participants in the Efficient Buildings Fund; bond holders; other creditors of the Bank; or the finances of the Bank.

1. Interest is to be calculated on the basis of a three hundred and sixty (360) day year and twelve (12) thirty (30) day months on the outstanding loan balance, paid semi-annually on March 1st and September 1st, and may be capitalized during construction. Borrowers will be contractually liable for the Market Rate on the Loan but will be billed only for the Subsidized Interest Rate. In the event of a default by the Borrower or other Borrowers in the EBF program, the Bank may bill the Borrower for the Market Rate.

B. Fees: The Bank will charge an Origination Fee of one percent (1.0%) of the principal amount of the loan at closing with a minimum of one thousand dollars ($1,000). All out of pocket closing costs, i.e. Borrowers cost of issuance, Bank cost of issuance, Bank underwriting costs, and any other closing costs, will be paid by the borrower(s). The Bank will also charge an annual Service Fee of one-half of one percent (0.5%) of the outstanding principal payable semi-annually at each interest payment date. A late payment fee will be charged for every fifteen (15) days that a payment is late of five percent (5.0%) of the amount of the payment.

C. Amortization: Amortization will begin within one year after completion of construction and one year after closing for a refinancing. Principal payments will be made annually on September 1st and the schedule of payments will be structured to meet the debt service and financial assistance needs of the Borrower

D. Term/Final Maturity: The length of the term of financial assistance awarded shall be determined by the Bank in consultation with the Borrower. The useful life of the project(s) shall, among other factors, determine the length of the term of the financial assistance. For applications with multiple projects with varying lengths of useful life, a blended useful life calculation may be utilized.

E. Prepayments: The loan may be prepaid by the Borrower at any time but may be subject to a prepayment penalty based on the cost of reinvesting the prepayment, the cost of prepaying outstanding bonds of the Bank or any other negative financial impact to the Bank.

F. Security: Each project funded through an Efficient Buildings Fund loan shall be subject to an investment grade audit to establish the projected energy savings. All audits shall be reviewed and verified by the OER. Loans will have a pledge of:

1. An appropriations pledge;

2. General revenues; or

3. May be secured by any other assets or pledges of the Borrower and upon such other terms and conditions as the Bank deems appropriate to protect the interests of the other participants in the EBF program of the Bank; bondholders; other creditors of the Bank; or the finances of the Bank.

G. Construction Progress Payments:

1. Progress payments for each construction project will be made through the Construction Proceeds Fund (CPF). Loan proceeds will be transferred monthly from the CPF for each Borrower based upon approved Requisition Forms submitted to the Bank. Upon receipt of the Requisition Forms and all associated Requisition Documentation, the Bank will verify:
a. That the costs requisitioned for payment are in connection with a project(s) listed on the project priority list established by the OER;

b. The vendor is identified in the contract; and

c. There is sufficient availability in the CPF to make the payment; and

d. The OER has reviewed the Requisition Forms and Requisition Documentation and approved payment be made by the Bank.

2. Payments will be made directly to the vendor and/or the Borrower for reimbursements by the Bank, and a "paid" stamped copy of the Requisition Form will be sent to the Borrower.

3. The OER will perform periodic project inspections to:
a. Monitor construction progress;

b. Verify eligibility of construction cost under the program; and

c. Ensure construction is in conformity with Plans and Specifications.

4. The OER will provide a copy of the inspection report to the Bank. Any adverse conditions will be reported to the Bank, who may suspend further payments until the adverse conditions have been rectified. The OER will perform a final project inspection before the final payment is made by the Bank.

Disclaimer: These regulations may not be the most recent version. Rhode Island may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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