FOR IMMEDIATE RELEASE: 7/20/2016
WASHINGTON, DC: Rep. Chris Van Hollen (D-MD) has introduced H.R. 5802, the United States Green Bank Act of 2016, which establishes a National Green Bank to provide financing to regional, state, and local Green Banks. Seven Democratic representatives are co-sponsoring the bill: Earl Blumenauer (OR), Matt Cartwright (PA), Gerry Connolly (VA), Elizabeth Esty (CT), Jim Himes (CT), Eleanor Holmes Norton (DC), and Paul Tonko (NY). Senator Chris Murphy (D-CT) said he intends to introduce a companion bill during this session in the Senate.
“Creating good-paying jobs, gaining energy independence, and tackling climate change are some of the most pressing challenges we face as a nation,” said Congressman Van Hollen. “To address them all, we need to accelerate the development and deployment of clean energy technologies. This legislation will provide state and local Green Banks the support they need to jump-start innovative renewable energy and energy efficiency projects. Action to prevent the most harmful impacts of climate change is long overdue, and the creation of a national Green Bank is one way we can build a 21st century clean energy economy that spurs growth in industries that create more good-paying American jobs.”
“Connecticut launched the first-ever Green Bank in the country in 2011, and it’s attracted over $800 million of investment in clean energy since,” said Senator Murphy. “Green Banks bring together the public and private sectors to save customers money, create good jobs, and help the environment. The Connecticut model is proof that Green Banks work. I’m glad I get to work alongside Congressman Van Hollen to reintroduce the Green Bank Act and spark billions of dollars of new investments in clean energy.”
National Green Bank legislation was first proposed in 2009 and last reintroduced in 2014. Both bills received bipartisan support. Since then, the number and size of Green Banks have grown rapidly. Green Banks now exist in California, Connecticut, Hawaii, Montgomery County (MD), New York, and Rhode Island. The National Green Bank seeks to accelerate this growth by making it easier for Green Banks to access capital.
“A lack of access to capital is the single biggest barrier for Green Bank growth,” said Reed Hundt, CEO of the Coalition for Green Capital (CGC). CGC, a nonprofit organization, has consulted on establishing Green Banks for state and local governments across the country. “There is enormous pent-up demand for these institutions, which are designed to be financially self-sufficient, but states and cities face such budget constraints that it’s difficult for them to come up with the funds. The Green Bank Act directly addresses this barrier.”
Green Banks are public finance authorities that use limited public dollars to leverage greater private investment in clean energy. Green Banks accomplish this by providing financing, securitization, and other forms of market development support for clean energy projects and organizations. The National Green Bank would provide a comprehensive range of financing—including loans, loan guarantees, and other forms of risk mitigation—on a competitive basis to local Green Banks. The National Green Bank would solely be a pass-through for allocating funding to qualified institutions, meaning authority over project selection and management would remain with local Green Banks. The National Green Bank would have an initial capitalization of $10 billion, and a maximum capitalization of $50 billion.
“The Green Bank Act of 2016 will use the historically low cost of capital to drive investment in critical infrastructure in the United States,” said Doug Sims, Director of Strategy and Finance and the Natural Resources Defense Council and Co-Manager of the Green Bank Network. “The Act ensures that decisions will be made at the local level to address local needs. If enacted, the Green Bank Act will spawn green banks all over the country. These banks will learn how to quickly scale green investment from the existing Green Banks that are part of Green Bank Network. The Banks in the network are already demonstrating the many benefits of the green economy.”
“A National Green Bank would be a game changer for accelerating clean energy growth at the state level,” said Bryan Garcia, President and CEO of the Connecticut Green Bank. “In Connecticut, we are seeing more and more private investment in our state’s clean energy economy and the National Green Bank would expand this public-private partnership for energy security, job creation, and climate protection.” According to its most recent financial report, the Connecticut Green Bank sparked $365 million in private clean energy investment in the past year, numbers that could grow with support from the National Green Bank.
Program Director, Coalition for Green Capital