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New Resource Bank to Promote Ventures That Aid Environment

By JIM CARLTON
November 14, 2006; Page B2

SAN FRANCISCO — One of the nation's first "green" banks -- focused on investing in clean technology and other green ventures -- has started here with backing from a roster of Silicon Valley and other business heavyweights.

Named New Resource Bank, the institution is set to hold its grand opening today with an initial equity infusion of $24.7 million from 240 founding investors, including Lotus Development founder Mitch Kapor, Sybase co-founder Bob Epstein and WR Hambrecht managing director Bob Hambrecht. Another prominent backer is Triodos Bank of the Netherlands, which started a green investment fund in 1990. Although the grand opening is today, the bank has been taking deposits since September.

Europe has led the U.S. and many other parts of the world in investments in alternative energy and other clean technologies. But in the past few years, investment interest in green technology in the U.S. has taken off, partly because of increased concerns over the stability of traditional energy sources and their impact on the environment. Among others, Vinod Khosla, a prominent Silicon Valley venture capitalist, and investment banks Credit Suisse Group and Morgan Stanley have invested in green technology.

Under its business model, the New Resource Bank plans to serve as both a traditional community bank and as a backer of green ventures, said Peter Liu, co-founder of the institution. "Part of our strategy is to meet head-on the growing sustainable business market, while giving our depositors a safe and sound way for their money to work consistently with their values," Mr. Liu said.

The bank plans to target loans in green areas, including alternative energy, organic farms and green construction. The bank has already begun to make green loans, including to a housing-retail development in Berkeley, Calif., that is using a more efficient design for energy. For loans that aren't necessarily green, Mr. Liu said his bankers would try to encourage those borrowers to be greener, such as by introducing them to green associations and techniques related to their businesses.

The bank is likely to face the same challenges of any new bank, including tough competition and maintaining a high ratio of performing loans. After the bank -- which is federally insured -- takes in money from depositors, it will be able to make initial loans totaling about $300 million, Mr. Liu said. It may expand to other cities around the U.S. if the business model works out, he said.

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