Henry Litman, senior director and senior vice president of investment at the Coalition for Green Capital testified before the Minnesota State Senate Energy, Utilities, Environment, and Climate Committee in support of legislation to create a state green bank.
Introduction
Thank you Mr. Chairman and members of the committee for the opportunity to speak with you this morning. My name is Henry Litman, Senior Director and Senior Vice President of Investment at the Coalition for Green Capital. For over a decade, CGC has been the national leader in establishing and supporting green banks around the United States. We also were drivers of the Greenhouse Gas Reduction Fund provision of the Inflation Reduction Act and manage the American Green Bank Consortium (the association of the nation’s existing green banks).
National Context
- Green banks are a proven tool for stimulating public-private investment in emissions reducing investments across the country. 25 green banks currently operate in 18 states and the District of Columbia, with several more in earlier stages of development.
- This week, the American Green Bank Consortium will issue its 2022 annual report. The report will show that since 2011, green banks have used $4.2 billion dollars of public and philanthropic funds to generate a total of $14.8 billion of public-private investment in emissions-reducing projects. These projects have created jobs, reduced energy costs, and lowered air pollution for residents and businesses.
- Green banks can be particularly effective in making sure low-income and disadvantaged communities are included in the clean energy transition. In 2022 alone, green banks mobilized over $1.2 billion of green investment in these areas.
Opportunity in Minnesota
- The Minnesota Innovation Finance Authority can play a key role in advancing the carbon to clean transition in this state. Minnesota has both ample opportunity for green bank investment and ample need, particularly in rural, tribal, and low-income areas that historically have not received their fair share of investment.
- This is a gold standard bill with robust consumer protection and accountability standards. It is well designed to mobilize public-private investment in the state.
- The Minnesota Innovation Finance Authority will have an opportunity to directly finance or support others in financing energy improvements in many sectors including transportation, agriculture, and industry.
- The Minnesota Innovation Finance Authority will not compete with private lenders. It will create more opportunities for them by creating new investment opportunities and reducing risk in energy lending.
Greenhouse Gas Reduction Fund
- Finally, the Minnesota Innovation Finance Authority will maximize the state’s access to the Greenhouse Gas Reduction Fund, a $27 billion provision within the federal Inflation Reduction Act to accelerate public-private investment in GHG reducing investments.
- As written, the Minnesota Innovation Finance Authority legislation aligns closely with the purposes of the Greenhouse Gas Reduction Fund and sets the state up to receive hundreds of million dollars in additional federal investment over the next five to ten years