The Clean Energy Future Blog
By Coalition for Green Capital
Press Release: May 28, 2019
The Coalition for Green Capital (CGC) today released the first annual industry report of the American Green Bank Consortium, finding that cumulative investment caused by American Green Banks has exceeded $3 billion for the first time.
CGC supports the work of state and local Green Banks, as well as the formation of new Green Banks. The full report is available here: Green Banks in the United States: 2018 Annual Industry Report.
In total, the report finds that American Green Banks have caused $3.67 billion in clean energy investment, with $676 million of this investment taking place in 2018. The Green Bank concept was initially proposed in 2009, and there are now 14 Green Banks in the U.S. with more in development.
Green Banks are unique in that they use innovative finance solutions and incentives to facilitate private investment in clean energy projects that would otherwise struggle to find capital. The report finds that the impact of every dollar of direct public Green Bank investment was more than tripled by the private investment it attracted. The ratio of private to public investments generated by the American Green Banks was 3.4 to 1.
The report also reviews broader trends across Green Banks, finding a shift towards more diverse sources of capital to fund the Green Banks themselves, and an increased focus on the importance of energy storage technologies and climate resilience measures.
Bryan Garcia, president and CEO of the Connecticut Green Bank, said: “We’re excited to be part of the American Green Bank Consortium and to have our work reflected in its first annual report. Industry-wide reporting on Green Banks has never before been produced on a consistent basis, and the increasing availability and depth of this reporting will be important to the growth and development of our industry.”
The report comes at a time when a national conversation is taking shape on how best to finance massive investments in infrastructure, and particularly in clean energy. Presidential candidates have recently released climate plans that have included the creation of a Green Bank, and legislation outlining a national Green Bank was also recently introduced in the Senate.
Reed Hundt, CEO of CGC, said: “Green Banks need to exist in every state if we want to win the battle against climate change. They need to be partners with the national Green Bank when it is created. Green finance will move the country rapidly from the carbon to clean platform, while guaranteeing that customers are better off.”
For more details see the full report: Green Banks in the United States: 2018 Annual Industry Report.
ABOUT CGC
The Coalition for Green Capital (CGC) is a non-profit organization focused on accelerating the growth of clean energy markets through the creation of Green Banks.
CGC offers a unique and proven capacity as the leading creator, advocate, and expert on Green Banks since 2009 and works directly to support the formation of Green Banks with governmental and civil society partners. CGC also provides on-going consulting and guidance to operating Green Banks.
For more information visit coalitionforgreencapital.com/.
ABOUT THE AMERICAN GREEN BANK CONSORTIUM
The American Green Bank Consortium is a project of CGC. Launched in 2019, the Consortium is a membership organization enabling Green Banks, capital providers, developers and other clean energy supporters to work together.
The Consortium creates value for members through services including facilitating the sharing of knowledge among Green Banks, and working with potential capital providers to design blended clean energy investment vehicles that work at scale across the entire network of Green Banks.
For more information visit greenbankconsortium.org.
CONTACT
Alex Kragie
Director of the American Green Bank Consortium
U.S. Green Bank Act of 2019 Would Provide $10 Billion+ of Capital to State and Local Green Banks
By Coalition for Green Capital
U.S. Senators Chris Murphy (D-Conn.), Chris Van Hollen (D-Md.), Richard Blumenthal (D-Conn.), Sheldon Whitehouse (D-R.I.), and Ed Markey (D-Mass.) this week introduced the Green Bank Act of 2019. The bill would inject billions of dollars into the U.S. economy to accelerate clean energy deployment, grow clean energy businesses, and deliver affordable clean energy to all Americans. This bill provides a framework for a Congress that wants take a leadership role in the fight against climate change. There is growing consensus that the federal government must directly invest in the clean energy transition, and this bill shows how it can be done.
“Senator Murphy is drawing up a blueprint for winning the battle against climate change,” said Coalition for Green Capital CEO Reed Hundt. “That fight will establish American global leadership and create millions of jobs.”
The United States Green Bank (USGB) formed in this bill would deploy capital through the growing network of state and local Green Banks and related institutions. Those funds would be blended with private, philanthropic and local public funds to finance a range of clean energy, efficiency, and climate change mitigation and adaptation projects. The USGB would be capitalized with up to $50 billion and catalyze multiples of that using the proven Green Bank model.
The members of the global Green Bank Network and the American Green Bank Consortium have already shown that public investment in clean energy deployment drives greater total investment, job growth and lower energy costs.
“The Green Bank model of mobilizing private investment into clean energy and energy efficiency projects has proven successful in states, counties, and cities across the country,” said Bryan Garcia, President and CEO of the Connecticut Green Bank. “In Connecticut, we are seeing lower energy costs for families and businesses, more high-wage jobs, and a reduction in the emissions that cause climate change. Senator Murphy’s proposal to create a United States Green Bank would help replicate and amplify these positive outcomes nationwide.”
The bill creates a new USGB as a wholly owned corporation of the U.S. government, housed within Treasury. It would be capitalized through the issuance of federal Green Bonds. The USGB would then provide capital to qualifying state and local Green Banks, to finance a range of clean energy projects in partnership with private investors. This proposed USGB would not, itself, directly finance projects. Rather, much like the CDFI Fund in the Treasury, it would inject capital into a growing network of purpose-built, mission-oriented clean energy finance institutions around the country.
In addition, the USGB would establish a “New Bank Division” that would exclusively provide technical assistance to those locations seeking to form their own Green Banks. Those Green Banks in turn would be eligible to receive financing from the USGB.
Green Banks across the US, from Hawaii to Rhode Island, have driven over $3.5 billion of total clean energy already. But all of them face the same constraint – how to expand when capital is in short supply from their local government partners. And many more Green Banks are in the pipeline. The Coalition for Green Capital is in discussion with elected officials across the country who want to implement Green Banks to finance clean energy in their communities, but all struggle to find the vital capital to get started. Under this bill, those leaders could create and designate their own Green Banks to be capitalized by the new USGB.
“The Colorado Clean Energy Fund was just announced by Governor Hickenlooper as the state’s Green Bank in December, and we’re already seeing huge demand for mission-driven Green Bank financing that outstrips our current capital,” said Paul Scharfenberger, Executive Director of the Colorado Clean Energy Fund. “Capital from the USGB would be instrumental in meeting that demand and bringing the benefits of clean energy to Coloradans across the state.”
By using the existing and growing network of market-based lending institutions, the legislation ensures that USGB financing serves local market needs and meet economic, energy and climate conditions specific to every state in the country. State and local Green Banks play a vital role in their clean energy economy, connecting projects and developers to capital. They help structure transactions that meet the parties’ needs and deliver cheaper energy to the end user.
“Michigan Saves commends Sen. Murphy for introducing the United States Green Bank Act of 2019, which, like us, seeks to create a clean energy landscape that everyone can benefit from,” said Mary Templeton, president and CEO of Michigan Saves, Michigan’s Green Bank.
The new legislation enters a growing national policy conversation in Washington and on the campaign trail around Green Banks and related investment structures. Heading into the 2020 election, there is growing recognition that proactive federal investment in the clean energy transition is now essential, and that tax credits and mandates alone will not address the climate crisis quickly enough. Unlike in past policy generations where federal investment was focused on R&D, or applied with strict limitations to commercial technologies, new approaches must be larger and deployment-focused. And, importantly, they must be designed to expand clean energy to all communities by delivering lower energy costs.
The New Consensus, architects of the Green New Deal, advocate for a federal Green Bank. Presidential candidates are calling for “a new dedicated finance authority” to channel $3 trillion of climate investment. At the same time, Green Bank action is spreading across the country at the state and local level, the laboratories of democracy. Legislation to form Green Banks has been introduced in Massachusetts and Maine. A new initiative is underway in Cuyahoga County Ohio to form a new county-level Green Bank. The Nevada Clean Energy Fund is about to commence operations. Local leaders from Hawaii to Florida are creating or expanding their Green Banks.
And existing Green Bank leaders are on the move, as well. Connecticut and New York Green Banks and the New York City Energy Efficiency Corporation (NYCEEC) are all seeking to serve new geographies to bring capital and best practices to new markets. The new American Green Bank Consortium was launched at the start of 2019 to support the growth and effectiveness of the Green Bank field. And the U.S. Climate Alliance, representing 24 state governors, launched a Green Bank initiative to support Green Bank formation in more states.
Today’s legislation marks the beginning of a multi-year effort to ensure that clear and defined Green Bank financing mechanisms are central to federal climate change investment plans. Click here to read CGC’s one-page framework for a federal Green Bank. To learn more about Senator Murphy’s legislation, read Senator Murphy’s statement and read CGC’s bill summary.
By Coalition for Green Capital
Today Washington Governor and 2020 Democratic Presidential Candidate Jay Inslee presented his $9 trillion “Evergreen Economy Plan.” The plan includes the creation of a $90 billion federal Green Bank called the Clean Energy Deployment Authority (CEDA).
Governor Inslee is the first presidential candidate to formally propose the creation of a federal Green Bank to catalyze greater total clean energy investment using public capital. Supporters of the Green New Deal and other presidential candidates have said that a Green Bank or related federal investment vehicles are crucial to addressing climate change. Governor Inslee is the first candidate to provide a blueprint for what federal investment in clean energy deployment would look like in 2021. As outlined in his plan, the Green Bank is not only a tool to address climate change. It would establish America’s economic and clean energy leadership and create jobs across the country.
Modelled on the CEDA legislation Governor Inslee first introduced in Congress in 2009, the federal Green Bank would provide low-cost loans and guarantees to accelerate clean energy deployment. The plan calls for the creation of CEDA as an independent non-profit federal financing authority outside of government.
It would finance all technologies that enable clean energy deployment and can accelerate the clean energy transition. It would work directly with state and local intermediary finance organizations. This includes state and local Green Banks, infrastructure finance authorities, CDFIs and others. This ensures that local clean energy market needs are met with federal financing and local expertise. In addition, CEDA will provide investment support to expedite the retirement of coal plants and other fossil fuel infrastructure. This is consistent with the Governor’s climate plan presented earlier this month.
Governor Inslee’s Green Bank plan provides the essential policy blueprint for turning large climate ambitions and targets into reality. It is built on a proven Green Bank model and works in concert with existing actors so capital can flow quickly. $90 billion of public capital can catalyze multiples of that in total investment, leveraging private and philanthropic investment to address underserved clean energy market segments.
Read CGC’s Framework for a National Green Bank policy for more information, and stay tuned for more analysis on this and other federal Green Bank plans.
By Coalition for Green Capital
The Energy Foundation, one of the Coalition for Green Capital’s key partners, has published an overview of CGC’s impact on the development of Green Banks in the US:
In fact, CGC was instrumental in establishing the Connecticut Green Bank—the nation’s first state-level green bank—by partnering with state government and public and private investors. CGC helped conceive of, design, advocate for, and implement the bank. Staff members also helped build broad support among industry and lawmakers, and ensured the bank would be funded with tens of millions of dollars per year. Additionally, the organization helped launch green banks in New York, Maryland, Colorado, and Nevada.
We are grateful for the support of organizations like the Energy Foundation to advance clean energy innovation. Read the full profile here.
By Coalition for Green Capital
“To win the climate battle, countries around the world must rapidly increase Investment through a systemic effort to drive markets from carbon to clean energy. Green banks have the capacity to bring the international climate finance architecture into alignment with Paris climate goals and drive transition to a clean economy,” said Reed Hundt, CEO of the Coalition for Green Capital, another summit organizer.
“Time and time again, entrepreneurial and commercially minded green banks have accelerated private capital formation in the low-carbon economy in industrialized economies, maximizing the impact of scarce fiscal resources. These institutions hold enormous promise in emerging markets, where every public dollar is even more precious, and the need for low-carbon development is just as pressing,” says Ilmi Granoff of ClimateWorks Foundation, lead sponsor of the Summit.
When 197 nations agreed to the detailed rulebook for the Paris Agreement in December 2018, the world finally turned the page from negotiation to action. The focus is now on ambitious national climate plans, including emerging economies whose emissions are projected to grow fastest. Mobilizing sufficient finance is a lynchpin in this effort.
The Green Bank Design Summit will build on a proven model of public Green Banks in advanced economies and CGCs work with the Development Bank of Southern Africa to form the first new climate finance facility in an emerging economy. More than two dozen developing nations will gather in Paris on March 18-19 to explore the establishment of national green finance institutions. They will be joined by leading private banks and development finance institutions also eager to play a role in the design of a new global climate finance system. The Green Bank Design Summit marks a moment of realignment in which a critical mass of nations is organizing in order to arrange and deliver avenues for finance that enable a profitable, effective, and rapid energy transition while promoting development goals.
The 25 countries attending the Summit come from every major developing region, including Asia (China, India, Vietnam, Malaysia, Mongolia, Indonesia, Cambodia, Kyrgystan), Africa (Nigeria, Rwanda, South Africa, Egypt, Kenya, Angola, Uganda), Latin America (Brazil, Chile, Argentina, Colombia, Mexico, Peru), the Middle East (Jordan), and Eastern Europe (Turkey, Ukraine). Together, they represent approximately 29% of the global population, 27% of global GDP, 69% of developing country GDP, and 44% of global CO2 emissions from fuel consumption as well as 72% of developing country emissions.
“Developing nations are getting serious about decarbonization, but they need to maintain a strong focus on economic growth and broad-based development. Success depends on the ability to inject finance into the right kinds of investments quickly enough. This is why so many of them are exploring green banks as a means to supercharge that process,” said Paul Bodnar, Managing Director at Rocky Mountain Institute, a partner in convening the event.
Also participating are some of the world’s largest infrastructure and banking companies such as Macquarie, HSBC, and Mizuho Bank; development finance institutions and multilateral funds such as Agence Française de Développement, the Green Climate Fund, and the Asian Development Bank; existing green banks representing the Green Bank Network; and philanthropic foundations and allied organizations.
“As these countries know, governments can’t do this work alone. Private investors want and need to be part of the solution, and green banks can bridge those partnerships to increase investment in clean energy and launch this paradigm shift,” said Douglass Sims, a Director and Senior Advisor at the Natural Resources Defense Council, an organizer of the event.
The summit will kick off the design of a new global platform for green bank design and formation supported by governments, philanthropy, and the private sector.
More information on the Green Bank Design Summit can be found here. Interested media will be granted limited access for interviews as available.
About Coalition for Green Capital
The Coalition for Green Capital’s (CGC)’s mission is to drive clean energy investment in the United States and in developing countries with the goal of creating a 100% clean energy platform. CGC incubates local clean energy finance organizations— often called green banks—and structures public, private, and mission-driven capital for investment through those organizations. CGC has created multiple green banks and related entities, which have driven over $2 billion of investment including the first green bank in the United States, the Connecticut Green Bank, and the first green bank in emerging markets, in South Africa. CGC is currently working with local partners on initiatives in the United States, Africa, Asia, and Latin America.
About the Natural Resources Defense Council
The Natural Resources Defense Council (NRDC) is an international nonprofit environmental organization with more than 3 million members and online activists. Since 1970, our lawyers, scientists, and other environmental specialists have worked to protect the world’s natural resources, public health, and the environment. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Bozeman, MT, and Beijing. Visit us at www.nrdc.org.
About Rocky Mountain Institute
Rocky Mountain Institute (RMI)—an independent nonprofit founded in 1982—transforms global energy use to create a clean, prosperous, and secure low-carbon future. It engages businesses, communities, institutions, and entrepreneurs to accelerate the adoption of market-based solutions that cost-effectively shift from fossil fuels to efficiency and renewable energy. RMI has offices in Basalt and Boulder, Colorado; New York City; Washington, D.C.; and Beijing. More information on RMI can be found at www.rmi.org or on Twitter @RockyMtnInst.
By Coalition for Green Capital
As the impacts of climate change continue to accelerate, the need for greater investment in clean energy technologies is becoming increasingly apparent. Since public dollars cannot bridge the massive funding gap alone, Green Banks have traditionally used public sector capital to leverage increased private sector investment. The collective capital formation driven by that intersection has been impressive, but the pace of climate change is driving the need to expand the investment capital for Green Banks in the United States. Impact capital represents a natural, “third leg” of the capital stool for driving greater climate investments at Green Banks in the US. This paper seeks to explore the most effective ways that Green Banks and their foundation partners can harness the potential of impact capital.
The emergence of impact investing by philanthropic foundations, in particular their use of PRI, is proving fertile ground for expanding the pool of capital to a host of socially-oriented endeavors. This paper uncovers evidence that these green shoots of investment are starting to take hold within Green Bank activities. This paper aims to highlight potential practices and financial structures that can catalyze greater climate-related investment through Green Banks.
The paper is the result of CGC’s conversations with foundations and its review of selected case studies of existing Green Bank PRIs among GBN members and similar entities in the US. The paper presents these case studies as examples of Green Banks acting as effective and capable intermediaries of PRI capital.
Despite the successful use of Green Banks to deploy PRI capital, the PRI capital deployed to date represents only the beginning of what could be possible. With continued innovation in and collaboration on financial structures, along with maturation in the overall PRI space, Green Banks are well-positioned to scale PRI investments in the future. Such investment will allow both foundations and Green Banks to make important progress towards the investment targets needed to avoid the worst impacts of climate change.
CGC is committed to helping Green Banks scale and develop their investment capabilities. As part of this work, CGC welcomes partners to further develop the opportunity to deploy PRI investments through Green Banks. For more information on partnership opportunities, please contact CGC at cgc@cgcstagingsite.wpengine.com.
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