Anton Steshenko, an MBA candidate at the Smith School, argues that the $60 trillion held by U.S. pension funds and insurers remains inaccessible to local governments because individual municipal projects are too fragmented or risky. His proposed Hybrid Institutional Capital Model (HICM) aims to bridge this divide by blending public credit enhancement with private investment. By using small amounts of public capital—roughly 10–20% of project value—as a first-loss buffer, municipalities can de-risk senior debt, making local projects attractive to institutional investors.

Steshenko points to regional intermediaries, such as the Montgomery County Green Bank, as the blueprint for this transition. These institutions successfully aggregate smaller projects into investable portfolios, achieving leverage ratios as high as 10:1. By integrating such green banks with existing federal programs like the Greenhouse Gas Reduction Fund, local governments could transform $5–50 million projects into reliable assets. Nima Farshchi, executive director of the school’s Office of Experiential Learning, notes that this approach provides a practical path forward that requires new institutional design rather than additional federal legislation.