The Coalition for Green Capital (CGC), doing business as the American Green Bank Consortium (Consortium), announced today that its network of partners caused a record amount of green investing in 2022: $4.64 billion.
The Consortium comprises 39 clean energy investors and lenders, both active and not yet funded entities, including local and state green banks, community development financial institutions (CDFIs), credit unions, state-sponsored agencies and other nonprofit organizations. They operate in 28 states, Washington, DC, and Puerto Rico and together employ more than 700 people. The latest results bring the total investment caused since 2011 to $14.8B.
Highlights of the Consortium’s 2022 annual report include:
- Active investors in the Consortium in 2022 caused $4.64B of investment in clean energy projects.
- Of the $4.64B, Consortium partners contributed $1.51B of their own capital, joining that up with $3.12B in private capital.
- More than $1.2B of these investments were in low-income and disadvantaged communities for a variety of clean energy projects, such as roof-top and community solar, and energy efficiency upgrades for families and schools.
- Since 2011, cumulative public-private investment caused by green banks has surpassed $14.85B. This amount includes $4.20B of public capital and $10.66B of private capital.
“The spectacular 2022 record of the American Green Bank Consortium proves the viability of the public-private engine as a driver of GHG reduction, air pollution reduction, environmental remediation, and end-user benefits,” said Reed Hundt, CEO and chairman of the board of CGC. “The focus on low and moderate-income communities shows that our Consortium partners know how to benefit the communities most severely impacted by environmental damage. On this track record, we are more confident than ever that we can present the Environmental Protection Agency with a compelling case to be a national green bank fully capitalized by the Greenhouse Gas Reduction Fund.”
The Consortium includes 39 partners. In 2022, 18 partners were active investors; the others are new entities that lacked access to capital to make investments. Consortium partners consist of state-sponsored agencies, independent nonprofits, and CDFIs. All draw principally on state and local governments and foundations for capital. The projects drawing investment generally reduce greenhouse gas (GHG) emissions and air pollution. They include, by way of example:
Montgomery County Green Bank and City First Enterprises, a community development financial institution, partnered to provide a Commercial Loan for Energy Efficiency and Renewables (CLEER) loan to implement energy efficiency improvements to a 212-unit affordable residential condominium high-rise in Takoma Park, Maryland. The project is estimated to save almost $75,000 per year and reduce 500 metric tons of greenhouse gas emissions.
In 2022, Michigan Saves launched the Detroit Loan Fund, an innovative loan program to supplement the existing loan loss reserve program it runs through local credit unions. The Detroit Loan Fund allows Michigan Saves to lend directly to Detroit residents who cannot qualify for a loan from a credit union due to a low FICO score. The program does not use credit scoring for underwriting, considering only a customer’s ability to pay. In just its first 5 months, the program deployed more than $500,000. This program, which is supported by the Kresge Foundation, allows Michigan Saves to serve disadvantaged communities more effectively, ensuring that the benefits of clean energy are reaped by those with the highest energy burdens. Detroit residents are approved for energy improvement loans at a 40% rate, far lower than the 70% statewide average. This program narrows that gap.
The Connecticut Green Bank and Capital for Change (the largest full service CDFI in Connecticut) partner on the Smart-E lending program for home energy improvements and on the Loans Improving Multifamily Efficiency (LIME) program to green multifamily housing properties. Capital for Change has cumulatively made over $113 million in loans through Smart-E, including $9.3 million in 2022. The Connecticut Green Bank is also working with Capital for Change to raise new capital for green lending, including a $25 million recapitalization supported by Amalgamated Bank.
“The tremendous growth is attributable to a number of factors, including the addition of eleven new partners to the coalition and to organic growth in investment by existing partners. Beyond last year’s record-high investment figures, the Consortium also saw several recently created entities start making investments for the first time,” said Henry Litman, senior director at CGC. “The green bank model has proven to be a powerful tool to finance clean energy projects that would not have otherwise received funding from private investors, but that are critical to meeting our climate goals. As such, we saw lawmakers in eight other states pass or introduce legislation to create a local green bank last year and expect more green bank legislation to pass this year. We’re excited for the future of the Consortium and welcome the opportunity to grow our partnerships across the country.”
“Consortium partners last year caused $1.2B of investments in low-income and disadvantaged communities, and are positioned to multiply that impact with the support of a fully-funded national green bank,” said William Barber III, CGC’s chief consultant of environmental justice and equity and chair of CGC’s Environmental Justice Advisory Board. “A backlog of tens of billions of dollars, coupled with a commitment and strategy to robustly engage communities as partners in projects that boost their own resilience, means our coalition is ready to quickly deploy the most significant investment ever for communities that have for too long faced the brunt of the climate crisis. The time to act is now.”