At least 70% of the funds will go to disadvantaged communities while 20% will go to rural communities and more than 5% will go to tribal communities.
On Thursday, April 4th, 2024 the nation’s first “green bank” network, an historic $20 billion investment aimed at making clean energy affordable to low-income and rural residents was announced by the Biden Administration.
The banks will provide low-or zero-interest loans “to fund tens of thousands of climate and clean energy projects across America, especially in communities historically left behind and overburdened by pollution,” the White House said.
The “green bank’ network upholds two of President Biden’s key campaign promises: slowing climate change and advancing environmental justice.
Under the Environmental Protection Agency’s Greenhouse Gas Reduction Fund—also known as the country’s first national green bank—eight community development banks and nonprofit organizations will receive federal funding to go toward rooftop solar installations, energy efficiency upgrades and other projects that help reduce greenhouse gas emissions. The Inflation Reduction Act created the green bank in 2022 with an initial federal investment of $27 billion.
Vice President Kamala Harris traveled to North Carolina on April 4th to publicize the announcement, appearing with EPA Administrator Michael Regan and North Carolina Gov. Roy Cooper at a press conference in Charlotte, where they named the eight recipients. The groups, which consist of Coalition for Green Capital, Power Forward Communities, Appalachian Community Capital, Climate United, Justice Climate Fund, Opportunity Finance Network, Inclusiv and Native CDFI Network, have committed to spend $7 in private investment for every $1 of government funding.
The White House said that the new initiative will generate about $150 billion in clean energy and climate investments and help the nation avoid the release of 40 million metric tons of carbon pollution each year through 2031. At least 70% of those funds will go to low-income and disadvantaged communities, the administration said, while 20% will go to rural communities and more than 5% will go to tribal communities.
“The majority of this $20 billion will go to communities that have historically been left out and left behind,” Harris said at the Charlotte event. “For the first time in history, we are providing tens of billions of dollars directly to community lenders to finance local climate projects.”
“Imagine a small business owner who can now take out a line of credit to buy a fleet of electric delivery vehicles, so he can stop paying for gas and reduce pollution at the same time,” she added. “Imagine a house of worship that can now get a zero-interest loan, so they can install solar panels to generate clean energy electricity for the entire neighborhood.”
Climate advocates largely celebrated the news, calling the move historic and saying it would jumpstart clean energy investments across the country. The Coalition for Green Capital, which received $5 billion, said it’s looking forward to collaborating with hundreds of community organizations and commercial partners on their projects.
To date, the coalition and its partners have helped secure more than $9 billion in public and private capital for clean energy projects in multiple states, including California, Colorado and New York. Some of the projects funded by the coalitions’ partners include the installation of solar and battery storage systems at two recreation centers in Detroit, which reduced the facilities’ energy bills by 35%, and helping Black churches in Georgia connect to clean-powered microgrids.
“The EPA’s awards of $20 billion compose the largest single capitalization of green banks in any country in the world,” Reed Hundt, Coalition for Green Capital’s CEO and co-founder, said in a press release. “The United States now can lead all nations in showing how public-private investment can deliver cheap clean power faster than anyone has predicted.”
Biden has by far done the most of any president to advance climate policy. The Inflation Reduction Act, which Biden signed into law in 2022, dedicates around $370 billion to climate efforts.
“These funds will be available for use in the next few months and will be put into action before November,” said Carla Walker, director of environmental justice and equity for the World Resources Institute’s U.S. branch. “That means low-income and disadvantaged communities across the country will soon start seeing a tangible difference in their lives, from greater access to clean energy technologies that lower their utility bills and clean their air to more job opportunities.”
Specifically, the new funding helps to bolster the president’s commitment, under the Justice40 initiative, to drastically reduce America’s persistent economic and health gaps. That program sets the goal that 40% of the overall benefits from certain federal investments flow to disadvantaged communities that have been disproportionately impacted by underinvestment and overburdened by pollution. The $20 billion going toward the new green bank network is covered by Justice40, the EPA said in an email.
That funding “is a crucial step toward addressing longstanding inequities and barriers to accessing much-needed capital for the communities that need it most,” Walker said. “It will empower these communities to become active participants in America’s clean energy transition.”
Kristoffer Tigue is a staff writer for Inside Climate News, covering climate issues in the Midwest. He previously wrote the twice-weekly newsletter, Today’s Climate, and helped lead ICN’s national coverage on environmental justice. His work has been published in Reuters, Scientific American, Mother Jones, HuffPost and many more. Tigue holds a master’s degree in journalism from the Missouri School of Journalism. Email him at kristoffer.tigue@insideclimatenews.org. Marianne Lavelle contributed to this report.
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