Projective Finance opens $7M onchain lending pool for Illinois solar projects

Projective Finance, a sustainability-focused real-world asset (RWA) financing platform, has launched a $7 million lending pool for Illinois public schools, giving decentralized finance (DeFi) investors direct access to municipal infrastructure projects in the United States.

The lending pool will fund solar energy installations across school districts in the state of Illinois, with infrastructure loans executed entirely onchain, Projective Finance said.

By leveraging blockchain technology, “What traditionally required multiple intermediaries, fund structures, and minimum investments in the tens of millions can now be accessed directly with full transparency,” said Josh Chinnaswamy, Projective Finance’s co-founder. 

As of June, more than 4,700 megawatts of operating solar capacity have been installed throughout Illinois. Source: Ilsolarmap

Projective Finance allows investors to participate in projects backed by government institutions, which typically have high credit ratings and a lower risk of default. The platform does not provide exposure to cryptocurrencies but instead focuses on government-backed renewable energy initiatives.

Projective’s infrastructure is built on Avalanche, a layer-1 blockchain developed by Ava Labs, designed for scalability and interoperability. 

Accredited investors can participate in Injective’s lending pool using the USDC (USDC) stablecoin. 

The State of Illinois will act as the guarantor for Projective’s lending pool, with all participating projects rated by Moody’s credit rating agency, the company said.

Related: $250M Ondo Catalyst fund signals ‘arms race’ for RWA tokenization

“Solar projects are facing a massive financing bottleneck” 

The US solar market has grown substantially in recent years, surpassing 160 gigawatts of installed capacity as of 2024, according to the World Resources Institute. Solar energy now accounts for an estimated 5% to 6% of the nation’s total electricity supply, nearly double its share in 2020.

Solar’s share of electricity generation in the United States. Source: Statista

Solar projects are also gaining momentum at the municipal level, particularly in school districts. By 2024, an estimated one in nine K–12 students would attend a school powered by solar energy, according to 2022 Generation180 report.

However, “thousands of shovel-ready projects [are] sitting idle because traditional financing can’t serve this market efficiently,” said Projective Finance co-founder Atticus Francken, who described solar projects as facing a “massive financing bottleneck.”

Tokenization is widely seen as a way to transform solar financing by making it more accessible, efficient and transparent. 

In 2022, BNP Paribas noted that tokenization could help catalyze renewable energy and ESG-focused investing by providing “more transparent investment opportunities” and giving smaller projects a much broader reach.

Projective isn’t the only platform exploring tokenized green energy investments. As Cointelegraph reported, the Italian green energy company Enel Group has partnered with a crypto wallet provider to enable fractional ownership of solar panels on the Algorand blockchain. The tokenized product allows residents to benefit from solar energy without physical installation. 

Related: SEC ends ‘regulation through enforcement,’ calls tokenization 'innovation'