A National Green Bank in 2017

The successful state-level Green Banks may be getting a national sibling in 2017. If elected, Secretary Hillary Clinton has pledged to create a $25 billion national infrastructure bank. The bank would fund projects of “regional and national significance” with an emphasis on “projects to modernize our energy, water, broadband, and transportation systems.” Clinton recently vowed to move on her infrastructure plans within the first 100 days of her presidency.

Clinton estimates that the activities of the $25 billion bank would create an additional $225 billion in private investment – a ratio of private to public capital of 9:1. This is in range with the impact on private investment that we’ve seen state and other national Green Banks achieve. Moreover, this impact can be achieved from a self-sustaining pool of capital, rather than one-off grants. In fiscal year 2015, the Connecticut Green Bank sparked $365 million in clean energy investment, more than the total amount of investment generated in 11 years by the prior grant-giving entity. Earlier this spring, Clinton pointed to the Connecticut Green Bank as an example of the type of work the national infrastructure bank would do:

Connecticut is leading the way. You have something called a green bank, a green bank that helps to fund energy efficiency and clean, renewable energy jobs. When I’m president, I want to have a national infrastructure bank that will fund these kinds of projects, that will make us richer and cleaner. – Hillary Clinton, April 24, 2016

Representative Chris Van Hollen first proposed the creation of a national green bank in 2009. Van Hollen reintroduced the legislation in 2014, which garnered 11 co-sponsors: Representatives Blumenauer, Cartwright, Connolly, Courtney, Esty, Himes, Langevin, Moran, Norton, Scott, Slaughter. A companion Senate bill was also introduced in 2014 by Senator Chris Murphy and co-sponsored by Senator Richard Blumenthal.

In creating a national Green Bank, the US would join other advanced economies such as the UK, Australia, and Japan. In each case, the national government seeded a new lending institution with public capital, which then invests in clean energy projects in partnership with the private sector. The public capital drives greater private investment in underserved markets to fill gaps. And because the capital is lent, rather than given away as a subsidy or expended (as is typical for traditional infrastructure like roads), the government actually gets its money back. A new national infrastructure bank in 2017, designed to leverage more private investment in a clean energy platform, would finally bring these proven and powerful financing techniques to the federal level.

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