Green banks may compete for $27 billion from the fund created by the Inflation Reduction Act – pv magazine USA

August 18, 2022William Driscoll

Green banks could compete for $27 billion in federal greenhouse gas reduction fund set up Law on reducing inflation (IRA), and use the money to provide financial and technical assistance to accelerate the deployment of “low- and zero-emission products, technologies and services.”

The fund reserves $7 billion for low-income and disadvantaged communities to deploy or benefit from zero-emission technologies, including rooftop solar. States, municipalities and tribal governments, as well as green banks, can compete for these funds.

The remaining $20 billion is available to green banks for direct or indirect investment in low- and zero-emission projects. Of that amount, $8 billion is reserved for low-income and underserved communities. Indirect investments will create new organizations or support existing organizations, including lenders and capital providers, targeting communities and low-income populations that provide financial assistance to projects that reduce or avoid emissions.

Green banks, as defined by the IRA, are funded by public or charitable contributions, not deposits, and provide capital, attract private capital and provide other forms of financial assistance to “rapidly deploy” projects to reduce greenhouse gas emissions and other forms of air pollution.

Coalition for a green capital announced that it plans to compete for funding from the Greenhouse Gas Emissions Reduction Fund along with a network of state and local green banks and community development financial institutions. The coalition’s CEO, Reed Hundt, said the American Green Bank consortium, made up of 23 members in 17 states and the District of Columbia, “has already committed $2.6 billion of its own funds” as well as nearly $9 billion of private sector capital “into green.” . projects that deliver financial returns while maintaining extremely low default rates.” He said the consortium has $20 billion worth of pending projects.

Connecticut Green Bank, the nation’s first state-level green bank, praised the adoption of IRAs and said that since its founding in 2011, it has mobilized nearly $2.5 billion, “creating thousands of jobs, reducing energy costs for thousands of families, businesses and communities, and reducing greenhouse gas emissions.”