Repayment of the loan would be covered by the estimated $2 million in energy savings per year, Tramm explained, adding that the city is not on the hook for extra costs.

"You only pay for what you get," she said. Future projects could include other types of facilities, such as streetlights, and extend into the private sector.

"The future purview of the trust is not limited to municipal buildings," Tramm said.

Unlike P3 deals, which come with tolls, availability payments and other public risk, Beitler added, the ESA model is more attractive because it presents no added burden to the taxpaying public.

"I think that many of the transactions that we do will not be P3s," Beitler told ENR. "They will be transactions that will generate a return on investment, and we would hope to use that return on investment for savings to essentially pay for the transaction."

David Hoffman, who sits on the infrastructure trust's board and is a partner at law firm Sidley Austin LLP, said the deal "really is a project that pays for itself." The ESA model, he added, is attractive because it allows the city to kick-start much-needed projects that might otherwise languish, while obtaining financing under more favorable terms than a bond issue.

"It's very unlikely that the city would be able to just spend this money out of its coffers on its own, and the city wouldn't be able to limit its downside risk," he said.