About the C3 Fund

What is the C3 Fund?
The Climate Catalytic Capital (C3) Fund is a fund administered by the Maryland Clean Energy Center (MCEC). It was established by the Climate Solutions Now Act of 2022 to leverage private capital investment in technology development and deployment, reduce greenhouse gas emissions, and address climate impacts in Maryland.

What does the C3 Fund finance?
The C3 Fund finances qualified projects: projects that advance the purposes of the C3 Fund under Section 10-855(b) of the Maryland Economic Development Article by reducing greenhouse gas emissions or enabling measures that address climate impacts. The application groups qualified projects into five categories: renewable energy; energy efficiency and building decarbonization; energy storage and resilience; clean transportation; and climate technology. A project may fall under more than one category.

Financing is offered through four investment windows: short-term bridge loans (Investment Window 1), a revolving line of credit (Investment Window 2), project feasibility grants (Investment Window 3), and term financing (Investment Window 4). A window is not limited to one project category. MCEC considers both the window and the project in its review, because the type of project affects how the financing is structured. MCEC reserves the right to adjust the investment windows at any time if required by law, or at its discretion after the application period closes.

What does the C3 Fund not finance?
Under Section 10-855(e)(3) of the Maryland Economic Development Article, the C3 Fund may not finance any project that installs new equipment that uses fossil fuels or improves the efficiency of existing equipment that uses fossil fuels. The Fund also typically does not finance long-term operating expenses, and no window funds work outside the scope of the C3 Fund Investment Guidelines.

What share of the C3 Fund must go to low- to moderate-income communities?
Under Section 10-855(f)(1) of the Maryland Economic Development Article, at least 40% of the C3 Fund balance in each fiscal year is reserved for qualified projects in communities with low- to moderate-income (LMI) households. The C3 Fund statute defines an LMI household as a household located in a census tract with an average median income at or below 80% of the average median income for the State of Maryland. Applicants are asked to describe the benefits their project delivers to these communities, and MCEC may include terms in the financing documents tied to the LMI commitments made at application.

Who makes funding decisions?
All funding decisions are made by the C3 Fund Investment Oversight Committee (IOC), an independent committee appointed by the MCEC Board of Directors with members experienced in clean energy finance, technology, climate policy, and law. The IOC makes its decisions using the approved C3 Fund Investment Guidelines and Priorities. The IOC meets every other month in accordance with the Maryland Open Meetings Act, and a majority vote is required to approve any investment. MCEC staff review applications and present those that pass review to the IOC.

Eligibility

Who is eligible to apply?
Businesses, nonprofits, and public entities that are Maryland-based or Maryland-serving. Applicants must be in good standing with the Maryland Department of Assessments and Taxation (SDAT) and hold an active Federal Tax ID (EIN). The proposed project must benefit Maryland, and the applicant must be willing to agree to the terms and conditions set by the IOC and those applicable to receiving financing from MCEC.

Are out-of-state organizations eligible if the project is in Maryland?
Yes. Applicants may be based outside Maryland, provided the proposed project delivers its primary benefit to Maryland citizens, businesses, nonprofits, municipalities, or institutions. Entities formed outside Maryland must be registered as a foreign entity in Maryland.

Who should be the applicant when a project is held in a special purpose entity (SPE) or joint venture?
The applicant should be the entity that will become the borrower or grantee if the project is selected. The application asks whether the applicant is an SPE or joint venture formed for the project and, if so, for the parent or sponsor organization. If the SPE does not have its own financial statements or tax returns, the entity with a controlling ownership interest should expect to provide its own.

Can I apply on behalf of a property owner?
Yes. The application asks whether you are applying on behalf of a property owner and, if so, asks you to confirm that you have the owner’s written authorization.

Can I apply to more than one investment window?
Yes, provided your project or organization fits each window you apply to. Each request requires its own application.

Can an organization apply for multiple projects?
Yes. There is no limit on the number of projects a single applicant may submit. Where each project is financed separately, submit one application per project. Where you are seeking one facility that covers several projects, such as a bridge loan for a group of projects or a line of credit for a pipeline, the application has a portfolio path that captures the set of projects in a single request. A single project with multiple sites or points of interconnection is one application.

If several projects are financed under one loan, can funds be moved between them?
Project costs are expected to align with the information submitted, and funding is generally not interchangeable between projects within a bridge loan. A line of credit for a rolling pipeline works differently: draws are approved against permitted uses as projects enter the pipeline.

Choosing an Investment Window

How do I know which investment window to apply for?
The need for funds and/or source of repayment help determine the right window for the applicant:

Investment Window 1, short-term bridge loan: a defined project with a repayment event expected within about 12 months, such as tax equity, permanent debt, a construction-to-permanent conversion, sale proceeds, or federal tax credit proceeds.

Investment Window 2, revolving line of credit: a portfolio of projects, whether a defined set identified today or a rolling pipeline, where draws are repaid from customer receivables, project sale proceeds, incentives, or other sources as each project is completed.

Investment Window 3, project feasibility grant: early-stage analysis for qualified projects. Preference is given to  projects that will benefit low- to moderate- income households and/or underserved communities.

Investment Window 4, term financing: a project or company that repays over time from operating cash flow, contracted revenue, operating savings, or a capital raise, with no single take-out event ahead of it.

If you are not sure, select “I’m not sure” in the application and MCEC staff will follow up to discuss options. Typical size, term, and repayment for each window are on the application page.

What is the difference between a bridge loan and term financing?
Both are loans, but they repay differently. A bridge loan (IW1) carries a project to a later financing event that pays it off, usually within 12 months. Term financing (IW4) is for projects and companies with no such event ahead of them, such as fleet electrification repaid from operating savings or contracted revenue, or a climate technology company repaying from company cash flow. IW4 loan terms may vary based on the project, and may include an initial interest-only period followed by regular payments of principal and interest. Solar and other projects that repay from tax equity, permanent debt, or a sale are generally better served by IW1 or IW2.

Who is the line of credit for?
Companies carrying more than one qualified project at a time, such as project developers, installers and contractors, working across clean energy technologies. The line covers upfront development costs and costs on contracted projects awaiting customer, incentive, or tax credit payment. The application asks whether the line supports a defined set of projects identified now or a rolling pipeline, and tailors the remaining questions accordingly.

Who is the project feasibility grant for?
Preference is given to qualified projects that benefit LMI households or underserved communities, sponsored by organizations that do not have the staff, funding, or technical expertise to carry out feasibility and predevelopment work on their own. Typical applicants include nonprofits, community-based and faith-based organizations, local governments, housing authorities, school districts, and other public and community-serving institutions. MCEC gives priority to applications that show both the community benefit and the need for grant support. Applicants that can fund predevelopment work themselves are generally better served by IW1 or IW2, where these costs are eligible uses.

My company is raising capital from investors. Can the C3 Fund invest?
For a company at the commercialization stage that is raising capital from other investors, MCEC may provide funding alongside those investors, such as a convertible note in IW4. The application asks whether the company is currently raising or has recently closed a round, and about the lead investor. Companies at an earlier stage may be better served by the Climate Technology Founders Fund.

Which project category should I choose?
Choose the category that describes the main purpose of the project. Solar with battery storage is renewable energy; choose energy storage and resilience only if the main purpose is backup power or the battery stands alone. Geothermal heating and cooling is energy efficiency and building decarbonization. Fleet electrification, including vehicles and charging infrastructure, is clean transportation. Companies developing or deploying advanced clean energy technology are climate technology. A project may fall under more than one category, and the goal of gathering this information is to understand the primary intent of the project and the projected outcomes.

What is a resiliency hub?
A community-serving facility, such as a nonprofit, public building, or house of worship, equipped with solar and battery storage so it can keep critical services running during a grid outage while delivering everyday energy savings to the host. Resiliency hubs fall under the energy storage and resilience category. Battery storage is expected for a resiliency hub, because backup power is the purpose of the hub; it is not required for other solar projects.

Applying

How do I apply?
There is one C3 Fund application for all four investment windows. It opens with a short set of eligibility questions, then asks which type of financing you are seeking: bridge loan, line of credit, feasibility grant, or term financing. Your answer determines which questions you see next, so you complete only the sections that apply to your request. The application is linked from the C3 Fund application page.

What are the key dates?
September 29, 2026: informational webinar with a walkthrough of the C3 Fund, the four investment windows, and the application.

September 30, 2026: application opens; the C3 Fund begins accepting applications submitted through the online system.

December 31, 2026, 5:00 p.m. ET: application closes for all four windows.

Is the application deadline flexible?
No. The application must be submitted by 5:00 p.m. ET on December 31, 2026. Supporting documents requested by MCEC after submission are uploaded on the schedule provided at that time.

What happens after I submit my application?
MCEC conducts a preliminary review of every submission and will contact every applicant with the outcome. If your application advances, MCEC will send a list of the documents it needs and provide access to its secure data room, where you can upload the requested documents. MCEC may request additional information during review. Applications that pass review are presented to the Investment Oversight Committee, which meets every other month, for evaluation and decision.

What documents will I need to submit?
You do not need to gather documents before you apply. Requirements vary by investment window and by request, and MCEC will confirm the specific list after reviewing your application. Typical requests include documents related to organizational structure, financial statements and tax returns, a project pro forma, a sources and uses of funds and capital stack summary, evidence of site control, support for the repayment source, and an IRS Form W-9.

Where do I upload documents?
Through MCEC’s secure data room, OneHub. After you submit the application, MCEC will send an invitation with access instructions to the person you identify in the application as the data room contact.

What should a project pro forma and capital stack summary include?
The pro forma is a project-level financial summary of expected cash flows, revenues, operating expenses, and financing assumptions over the relevant period. It should reflect the economics of the specific project, not the applicant’s overall organization. The sources and uses of funds and capital stack summary should identify every anticipated source of capital, including equity, debt, grants, and incentives, and every planned use of funds. Both should be prepared assuming receipt of C3 Fund financing, with the C3 Fund clearly identified as a source.

How is applicant data handled and kept confidential?
As an instrumentality of the State of Maryland, MCEC is subject to the Maryland Public Information Act, Ann.Code Md., General Provisions Article §§4-101 to 4-601 (“PIA”). The PIA generally prohibits the disclosures by MCEC of trade secrets, “confidential commercial” or “confidential financial” information but the ultimate determination as to disclosure may be made by a court. MCEC keeps all records of commercial activity it acquires in strict confidence to the extent permitted by the Open Meetings Act and PIA. MCEC will not disclose “confidential commercial” or “confidential financial” information you provide regarding the project except as required by law or as otherwise permitted under any documents, instruments, or agreements to which MCEC is a party. Applicants are responsible for clearly marking any materials they consider to be confidential, proprietary, or commercially sensitive at the time of submission.

Should I submit personal identifying information?
No. Do not submit personal identifying information (PII) through the application or the data room, including Social Security numbers, individual taxpayer identification numbers, dates of birth, or other sensitive personal data. If such information is submitted inadvertently, MCEC may restrict access to or remove it.

Who can I contact with questions?
Contact the C3 Fund team at [email protected].

Loans and Other Financing (Investment Windows 1, 2, and 4)

What are the typical sizes and terms?
Amounts and terms are set on a case-by-case basis. MCEC considers total project costs, the funds available in the C3 Fund, MCEC’s review and underwriting standards, and evaluation of project impact. Final amounts are at MCEC’s discretion and subject to approval of the C3 Fund Investment Oversight Committee.

What are the interest rates and fees?
The C3 Fund provides below-market financing to close critical financing gaps. In the current round, the maximum initial rate for bridge loans and lines of credit is anticipated to be 7%, which applicants may use for their financial analysis. Term financing rates are set to the repayment profile and risk of each project or company. The final rate for every successful applicant is determined by the project’s assessed risk and impact. A step-up in rate may be considered if a borrower requests an extension beyond the initial term. Bridge loans carry no origination or legal fees. Servicing fees may be considered for lines of credit, subject to IOC approval.

What can loan proceeds be used for?
Direct costs of developing, constructing, and deploying qualified projects: interconnection applications, studies, and deposits; engineering and design; permitting; equipment deposits and procurement; vehicles and charging infrastructure; site preparation and contractor mobilization; and initial construction and commissioning. Milestone payments to a contractor are eligible when tied to specific eligible activities. No window funds long-term construction financing, permanent project debt, or general operating expenses.

Can proceeds reimburse costs incurred before closing?
Generally, proceeds should be applied to eligible costs incurred after closing. Reimbursement of earlier costs may be considered case by case.

How and when are funds disbursed?
Bridge loans are typically a single disbursement at closing against the approved uses of funds. Line of credit draws are typically limited to once a month, and each draw must be supported by invoices or, where appropriate, an itemized statement documenting use of funds. Term financing is disbursed as set out in the loan documents to match the use of proceeds. MCEC’s goal for the current round is to disburse funds within two months of IOC approval, subject to completion of due diligence and closing conditions.

What stage should a project be at?
For a bridge loan or line of credit, projects are typically past initial planning, with site control secured and a development plan in place, but still advancing interconnection, permitting, final design, or other work needed to reach construction financing. Projects may apply before submitting an interconnection application, but interconnection is expected to follow shortly after. For term financing, the project or company should be ready to deploy, with its use of proceeds defined and its repayment source in view.

What level of site control is required?
Where the project requires a site, applicants should demonstrate site control or a credible path to it, such as ownership, a lease, an option, or a letter of intent.

What does “a clear source of repayment” mean?
For a bridge loan, a realistic plan for the take-out that repays the loan, such as construction or permanent financing, tax equity, sale proceeds, grants, or sponsor equity. Letters of intent or term sheets from capital providers are the preferred evidence, and preference is given to projects that have them. For a line of credit, MCEC reviews repayment across the portfolio, typically from customer receivables, project sales, or incentive receipts as projects complete. For term financing, a reliable source over the term, such as contracted revenue, operating savings, or company cash flow.

What are the collateral, guarantee, and equity requirements?
Collateral is determined by the project. A UCC lien on all business assets or on project-specific assets, including financed vehicles and equipment, may be required, and personal or corporate guarantees from sponsors are preferred. Borrowers are expected to show an equity contribution that reflects their role in the project; C3 financing should be one part of the funding, not the only source. Specific covenants are set during underwriting.

MCEC also reviews financial measures such as current ratio, debt-to-equity, tangible net worth, and unrestricted cash, and for companies with a limited operating history, cash on hand relative to operating needs, capital committed by other investors, customer contracts, and independent validation of the technology. These measures are not the sole determinants, and exceptions may be approved where other credit strengths, risk-mitigating factors, or project impact warrant.

Can the loan be repaid early, and when is collateral released?
Yes. A bridge loan or line of credit may be repaid from construction financing or any other source of capital before maturity. MCEC will typically not release collateral or other security until the loan is paid in full.

Project Feasibility Grants (Investment Window 3)

What does the grant fund?
The work that turns a clean energy concept into a project ready for financing: feasibility studies, energy audits, technical and engineering analysis, energy modeling and load analysis, schematic and preliminary design, financial modeling and capital stack development, and resource assessment and siting analysis. To some extent, permitting fees, environmental review, and interconnection study deposits are allowable with documented justification.

What does the grant not fund?
Construction, equipment, and installation costs; subscriber acquisition; and work already funded by another grant for the same scope. Reimbursement of costs incurred before the grant is awarded is generally not available, though exceptions may be considered case by case.

How large are the grants?
Up to $300,000. Larger awards are considered case by case for projects with exceptional scope or impact.

What makes a strong grant application?
Because this work comes before a project is ready for construction, strong applications show a clear implementation plan with identified next steps, a reasonable approach to funding the project if feasibility is confirmed, site control or a credible path to it, and capable project leadership and technical capacity. The application also asks what prevents your organization from pursuing this work without C3 Fund support, including your staff capacity and any funds or in-kind support you can contribute.

How and when are grant funds disbursed?
Draws are milestone-based, and deliverables are due within 12 months of grant closing. Depending on the scope of the work, funds may be disbursed in multiple advances. MCEC’s goal for the current round is to begin disbursing within two months of IOC approval.

What reporting is required from grantees?
Grantees report on study outcomes, findings, and project disposition (whether the project advanced to financing, was deferred, or was terminated) at study completion and at the recapture-evaluation date. All reporting requirements are set out in the grant agreement.

Evaluation and After Award

How are applications evaluated?
The IOC considers the eligibility, qualifications, and experience of the applicant; the financial feasibility of the project, including the availability of the other financing it needs; the level and type of greenhouse gas and climate vulnerability reductions; environmental, energy, and resource sustainability; cost-effectiveness; technological characteristics, including scale-up potential; jobs and workforce impacts; and contributions toward the statutory purposes of the C3 Fund. Shovel-ready projects and ready-to-implement proposals rank higher.

Strong applications show a clear LMI nexus, quantified GHG reductions, a realistic capital stack with identified repayment sources where applicable, evidence of project or organizational readiness, and a well-defined use of funds. Applications that catalyze private capital and generate a measurable return to the C3 Fund rank more favorably.

Is submitting an application a guarantee of funding?
No. Submission or approval of an application does not constitute a commitment or guarantee of financing or funding. All financing remains subject to IOC approval, completion and execution of satisfactory legal documentation, and fulfillment of all closing conditions.

What reporting is required after receiving an award?
Unless the award documents specify otherwise, recipients report at least annually on the construction or implementation status of the project, a financial statement of the C3 Funds spent in the preceding fiscal year, a summary of operations and activities during that year, and any other information the Committee reasonably requests. If an event occurs that may delay or materially impair the project, the recipient must report it to the Committee as soon as it arises. Where LMI commitments were made at application, the financing documents may include terms tied to them.

What standard provisions are included in the transaction documents?
Please be advised that as MCEC is an instrumentality of the State of Maryland, the following are some key terms and conditions that would be reflected in the transaction documents:

1. Foreign Jurisdiction, Venue, Arbitration, etc. Because of issues related to the sovereign immunity of the State, MCEC cannot consent to the jurisdiction of courts outside Maryland or to any form of binding arbitration. The Company must agree that all legal actions against MCEC will be brought in Maryland state courts.
2. Indemnification. Under Maryland law there are limitations on the ability of MCEC to enter open-ended future financial commitments such as indemnification or contribution obligations or “prevailing party” legal expense provisions. MCEC will not agree to indemnification, limitation of liability, or coverage of attorney’s fees.
3. MCEC Documents. MCEC requires all companies receiving funding from MCEC to execute MCEC-Specific Representations, Warranties and Covenants in the form approved by the Office of the Attorney General. The Specific Representation and Warranties address such issues as the Company standing, current payment of taxes, conviction of bribery or other offenses, and debarment by government agencies.
4. Public Information Act: MCEC is subject to the Maryland Public Information Act, Ann. Code Md., General Provisions Article §§4-101 to 4-601 (“PIA”). The PIA generally prohibits the disclosures by MCEC of trade secrets, “confidential commercial” or “confidential financial” information but the ultimate determination as to disclosure may be made by a court. MCEC will not disclose “confidential commercial” or “confidential financial” information regarding the Company except as required by law or as otherwise permitted under any documents, instruments, or agreements to which MCEC is a party.