What is a Green Bank

Being mission-driven means that Green Banks care about deploying clean energy rather than maximizing profit. They actively develop a pipeline of clean projects and seek out opportunities in the market. All Green Banks have the mission to address climate change, though many also have additional objectives such as improving resiliency or addressing underserved markets.

Establishment as institutions means that green banks are durable and can build up organizational culture and expertise. They have the autonomy to be flexible and responsive to the real world. In contrast to programs, institutions may try something, fail, and then try something different.

All Green Banks have the mission to address climate change, though many also have additional objectives such as improving resiliency or serving low-income communities.

Green banks use financing, not grants. Financing means that capital is eventually expected to be returned or repaid, and this helps to maximize the impact of each dollar that a green bank deploys. Because of this approach, green banks focus on markets where there is potential for payback. This generally means proven, technically viable projects that are well past the research and development stage. Financing can be done in tandem with other market development activities.

With their focus on accelerating the clean energy transition, green banks have timing in mind. They aim to maximize market penetration as quickly as possible in order to displace dirty energy. This is in contrast to passively making capital available as some existing programs do.

Green banks have timing in mind. They aim to maximize market penetration as quickly as possible in order to displace dirty energy.

Ultimately, green banks aim to fight climate change. We have a short window to accomplish the clean energy transition if we are to avoid the worst impacts. The accelerated adoption of clean energy facilitated by a green bank is a powerful and cost-effective part of a full climate policy platform.