Oswaldo Acosta Believes Green Banks & CDFIs Can Help Lead America’s Transition to a Clean Power Platform

Oswaldo Acosta joined the Coalition for Green Capital’s Board of Directors last year with an eagerness to spur collaboration and strengthen partnerships between community development financial institutions (CDFIs), local green banks and eventually, the national green bank. Having served as the head of City First Enterprises (CFE) for several years, he is keenly aware of the benefits and opportunities that arise when CDFIs participate in the revitalization of communities by investing in the transition to clean energy.

Acosta grew up in Sinaloa, Mexico, and went on to earn degrees from the Monterrey Institute of Technology and the London School of Economics and Political Science. He is now leading a CDFI with $75 million on its balance sheet. Mr. Acosta describes his journey “as a great American experience.” It’s that same American embrace of opportunity that he says will propel the U.S. to transition to a clean energy economy that is truly transformational and leaves no community behind.

As an entrepreneur launching a new venture on the eve of the Great Recession, Mr. Acosta found few opportunities for accessing capital until he met with a local CDFI. In 2008 he was able to secure his first loan from the Latino Economic Development Center (LEDC) in Washington, DC. Mr. Acosta’s grocery consumer goods company flourished thanks to the capital and network resources provided by LEDC.

Before he eventually sold the company to a larger corporation, Mr. Acosta relied on the opportunities and resources that LEDC extended to him, including help that allowed him to avoid bankruptcy.

“I went to LEDC and they gave me the money to buy our first truck,” said Mr. Acosta. “I bought a truck from Penske in Pennsylvania… and the rest is history.”

Now, as the president and CEO of another DC-based CDFI, Mr. Acosta is helping people who were in his position by providing underserved communities in the Washington, DC and Baltimore metro areas with unique financial tools and flexible access to capital.

In this role, he leverages his lending, project finance, and entrepreneurial experience to lead the organization’s efforts in advancing the region’s economic development agenda. He has also led the design and implementation of the strategic expansion of CFE activities to new investment categories, including clean energy, small business, and residential mortgage lending.

As a member of the Coalition for Green Capital’s Board of Directors, Mr. Acosta is excited at the opportunity to launch a national green bank to deliver much-needed resources to fuel an equitable transition to the clean power platform. He knows that bringing together local green banks and CDFIs will be an essential ingredient of the national green bank’s success and a principal example of the public-private partnerships that will be necessary to leverage public funds and attract private investment.

Pointing to CFE’s relationship with the DC Green Bank and the Montgomery County Green Bank, Mr. Acosta noted that each party contributes its expertise to the mission and that these partnerships serve as a template for how the national green bank could work.

Mr. Acosta also explained how the different risk appetites of multiple investing partners will be able to complement each other when funding difficult projects and developing customized lending opportunities.

“Green banks have a policy mandate to make loans where there’s higher risk–perceived or otherwise–in order to promote the green agenda, while CDFIs have a similar mandate to benefit low-income communities,” he said. “Together, we can achieve outcomes that further both policy agendas. As we move forward, we will need to respond to our creditors and shift our lending culture before we master this new asset class.”

Mr. Acosta notes that the symbiotic relationship between CDFIs and green banks speaks to the broader success of the policy.

“Just collaborating, complementing each other’s risk appetites, sharing infrastructure, knowledge of the market, and more importantly, presenting a single voice to the local political principals. That’s an important piece,” said Mr. Acosta. “It’s really meaningful and will be a great example of policy working well.” He added, “In the future, all green banks will be CDFIs and all CDFIs will be green banks. Failing to achieve this convergence in the category will be disastrous for the sector.”

Mr. Acosta explains that the United States has an extraordinary opportunity to be a global leader in clean energy and believes that the national green bank is a key tool to help achieve that reality.

“This policy will allow America to prove the concept of massive commercialization of clean energy benefits, of clean energy technologies in low-income communities, and therefore create massive possibilities for American companies,” he said. “The national green bank has the potential to be a template for places like western democracies and other areas of the world. That’s how I see the interplay between CDFIs, the national green bank, and regional green banks. We are at the cutting edge of what will be an enormous new market opportunity.”

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