Maybe it's the credit crunch and difficulty getting traditional financing.

But this year the Legislature is considering requests from several companies for about

$500 million of special purpose revenue bonds, or bonds that typically receive exemptions from state and federal taxes because they finance something that benefits the public.

"Because they are private entities, we act as a conduit," said Scott Kami, administrator of the state Financial Services Division.

"The thing they have to show us is that the public is going to benefit from the financing."

Special purpose revenue bonds typically have been used by hospitals, electric companies and private schools to finance big projects, with some $1.61 billion of them issued and outstanding at the end of June last year. The bonds are an attractive way to finance because they typically carry lower borrowing costs.

In recent years, there's been a boom in the number of companies seeking financing for renewable energy and other environmentally connected projects. But just because they've been authorized doesn't mean the projects move forward. At the end of June,

a dozen companies had been authorized for $547 million of bonds but had yet to issue them.

These ranged from a company wanting to use sugar to produce ethanol to a firm wanting to produce hydrogen. The process of issuing the bonds for renewable energy companies may also include getting agreements with Hawaiian Electric Co. The utility is currently negotiating with such providers under a request for proposals issued in 2007.

HECO spokesman Peter Rosegg said at least one of those on the short-list is a waste-to-energy project.

Kami said companies need to demonstrate an ability to meet federal and state laws for tax-exempt financing along with being able to repay the bonds. He said the process almost mirrors that of borrowing from a bank or another lender.

Cost for the bonds is borne by the companies and the state does not back or pledge credit for the bonds, nor is the state responsible for the debt payments.

Gary Slovin, a Honolulu attorney representing one of the bond seekers, One Planet Pacific Energy, said the projects need to stand up to financial and technological scrutiny if they stand a chance of having successful bond issues.

Viewed in that light, the projects probably could qualify for traditional financing.

But "these bonds do generally give you a lower interest rate, and in today's market that might be particularly helpful," Slovin said.