Minnesota Climate Innovation Finance Authority Positions State to Receive Millions in Federal Funds
Saint Paul, Minnesota— Minnesota lawmakers have passed legislation to create the state’s first green bank and position the state to receive federal funding from the Environmental Protection Agency’s (EPA) Greenhouse Gas Reduction Fund (GGRF). HF2336 and SF2301, bills that were approved by lawmakers this month, establish the Minnesota Climate Innovation Finance Authority with an initial fund of $45M. Governor Tim Walz has previously expressed support for a state green bank and included $34 million in his 2022 budget for a green bank.
“We congratulate leaders in Minnesota for getting this legislation passed and getting one step closer to creating the state’s first green bank,” said Eli Hopson, executive director and COO of the Coalition for Green Capital. “The Minnesota Climate Innovation Finance Authority will mobilize millions of dollars in public-private investments for the state and deliver clean energy projects in disadvantaged communities that have historically faced the brunt of the climate crisis. This legislation also prepares the state to receive even more capital from the EPA’s $27B Greenhouse Gas Reduction Fund. We look forward to working with our new partners and welcoming Minnesota to our growing network of green banks.”
“The Minnesota Climate Innovation Finance Authority will be a key partner in delivering historic federal climate investments as a member of the national green bank network,” said Reed Hundt, CEO of CGC. “Along with our growing network of clean energy lenders and investors, we intend to present a strong application to the EPA to launch a national green bank network and maximize the investment of the GGRF.”
A 2020 CGC report found that capital markets and financing tools did not provide adequate support for clean energy projects in Minnesota and outlined steps to establish a green bank to fill this need. Having advocated for nearly a decade for Congress to capitalize a nationwide green bank, CGC also explained in their report that the state should establish a local green bank in preparation for the federal investments that were to come, should such legislation pass.
CGC recently testified before the Minnesota Senate Energy, Utilities, Environment, and Climate Committee, providing expert testimony about the GGRF and the opportunity to deploy the highly successful green bank model in the state.
“The Minnesota Climate Innovation Finance Authority can play a key role in advancing the carbon to clean transition in this state,” said CGC. “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 green bank legislation is supported by a broad coalition of organizations in the state. In an op-ed, Julia Nerbonne, executive director of Interfaith Power and Light, writes that creating a state green bank will help ensure equitable access to clean energy for low-income and disadvantaged communities, pointing to the success of the American Green Bank Consortium and the upcoming opportunity to leverage the EPA’s $27B GGRF.
Since 2021, eight states have passed or introduced green bank legislation including Utah; New Mexico; Alaska; Minnesota; Illinois; Virginia; Vermont; and Maine.
These new entities will build upon the incredible success of the existing coalition of green banks and clean energy lenders that makeup the American Green Bank Consortium. The consortium’s latest report found that its members caused $4.64B in clean energy investments in 2022, including more than $1.2B that was invested in low-income and disadvantaged communities.
CGC has announced the formation of new strategic partnerships with clean energy lenders and investors. This robust network of green banks and clean energy lenders has already identified an initial pipeline of green projects valued at $14B in public-private capital over the next several years and intends to apply for $20B in federal funds from GGRF to launch a national green bank network.
ABOUT COALITION FOR GREEN CAPITAL
The Coalition for Green Capital (CGC), doing business as the American Green Bank Consortium, is a 501(c)(3) chartered specifically to reduce greenhouse gas emissions and other forms of air pollution and redress climate and energy related environmental injustice. Green banks are a proven finance model that uses public and philanthropic funds to mobilize private investment in renewable energy, energy efficiency and other decarbonization technologies. For over a decade, the Coalition for Green Capital has led the Green Bank movement, working at the federal, state and local levels in the U.S. and countries around the world. For more information, visit: https://coalitionforgreencapital.com/.