These 8 nonprofits got $20B from the Biden administration for local clean energy financing. Now what? – GWC Mag

Dive Brief:

• Communities are one step closer to accessing $20 billion in federal funding for clean energy and climate projects, with the Biden administration announcing on April 4 the eight nonprofits that will supply Greenhouse Gas Reduction Fund money to local efforts.
• The selected nonprofits will use the money to finance tens of thousands of projects, from solar installations on small businesses to affordable housing electrification, particularly in low-income and disadvantaged communities, the U.S. Environmental Protection Agency says. 
• The EPA has a statutory deadline to commit the money to specific projects by September amid efforts by Republican Congress members to repeal the Greenhouse Gas Reduction Fund, which would rescind any unobligated funds. 

Dive Insight:

The selected nonprofits will act as “green banks,” providing financing for clean energy projects that might not otherwise pencil out, especially in lower-income communities. More than 70% of the $20 billion will go toward low-income and disadvantaged communities, according to the EPA.

These green banks will help close the gap between “financeable theoretically” and “financing in reality” for the clean energy economy, Ilmi Granoff, senior fellow at Columbia University’s Sabin Center for Climate Change Law, wrote in an April 4 LinkedIn post. 

By pushing such projects over the finish line, the Biden administration expects to mobilize nearly $7 in private capital for every $1 in grant funds. That would turn the $20 billion into $150 billion in investment over the next seven years, according to the EPA. 

Three groups representing U.S. cities — Climate Mayors, C40 Cities and the Urban Sustainability Directors Network — urged the nonprofit recipients of the grant funds to work with cities when developing investments.  

“Cities are uniquely positioned to ensure that the projects funded by GGRF recipients deliver the maximum benefit to people on the ground – cleaner air, good paying jobs, and lower energy bills,” C40 Cities Head of U.S. Federal Affairs Kate Johnson said in a statement. 

The $20 billion grant selections announced April 4 are split across two separate initiatives. 

Three nonprofits were selected for the $14 billion National Clean Investment Fund, which aims to provide affordable financing to private-sector investors, developers, community organizations and others. Under this initiative, the Climate United Fund will receive nearly $7 billion, Coalition for Green Capital will receive $5 billion and Power Forward Communities will receive $2 billion.

The second, $6 billion initiative, the Clean Communities Investment Accelerator, named five nonprofits that will establish hubs to provide funding and technical assistance to community lenders working in low-income and disadvantaged communities. Under this initiative, the Opportunity Finance Network will receive about $2.3 billion, Inclusiv will receive nearly $1.9 billion, the Justice Climate Fund will get $940 million, Appalachian Community Capital will receive $500 million and the Native CDFI Network will receive $400 million.

The EPA will hold an informational webinar on the National Clean Investment Fund on April 10 and another on the Clean Communities Investment Accelerator on April 11. Webinar recordings will be posted on the EPA’s website, along with details for additional virtual events.

The Greenhouse Gas Reduction Fund also encompasses a $7 billion Solar for All program, for which the EPA expects to announce grant recipients later this spring. The recipients of these grants will be states, municipalities, territories, tribal governments and nonprofits that will finance and provide technical assistance for residential rooftop solar and community solar projects.

The Greenhouse Gas Reduction Fund faces threats from Republican federal lawmakers calling it a “green slush fund.” In an October 2023 letter to EPA Administrator Michael Regan, Republicans on the House Oversight and Environment subcommittees cited concerns about the EPA’s lack of experience administering this type of funding and the speed at which the agency must obligate the funds, which they said would increase the likelihood of financial waste, fraud and abuse. The House passed a bill in March that seeks to repeal the Greenhouse Gas Reduction Fund, which President Joe Biden said he would veto if it came across his desk.