By Karin Rives
Green banks will be critical for meeting U.S. President Joe Biden’s ambitious goal to steer 40% of clean energy investments to disadvantaged communities, according to an administration official who also noted that green banking must rapidly expand to meet that need.
To boost this growing but still small piece of the financial sector, green banks need the support of a federal accelerator program, Jahi Wise, a senior White House adviser for climate policy and finance, told a Yale University event May 11.
“Doing project finance at the individual facility level, at the community level, is complicated,” Wise said. “Sometimes the transaction costs can be high, and we need institutions that are specialized in doing that work. Green banks have stepped up to fill the void. We need to support these institutions with technical assistance and with capital.”
Democrats in the U.S. Senate and House of Representatives introduced bills early this year to establish a federal program that would carry the “accelerator” mantle and stimulate green banks. The broad climate bill introduced in the House on March 2, known as the CLEAN Future Act, would authorize $100 billion in federal support for the accelerator to boost private sector investments in clean energy and other climate solutions.
Such policy proposals coincide with a growing interest in green banking.
In 2020, green finance spurred a record $1.69 billion in total U.S. investments, up from just under $709 million in 2015, according to a new report by the American Green Bank Consortium. The group of 21 local green banks and six foundations is a project of the nonprofit Coalition for Green Capital, where Wise was a policy director before being tapped for the White House job.
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