US EPA awards $20 bil to community lenders for climate, clean energy projects

The Biden administration awarded $20 billion to community lenders on April 4 to provide financing for climate and clean energy projects, an investment expected to mobilize an additional $130 billion in private capital, according to federal officials.

The US Environmental Protection Agency selected eight nonprofits to administer the loans, funded by two programs within the US Inflation Reduction Act's $27 billion "Greenhouse Gas Reduction Fund." The spending program is the 2022 climate law's single largest nontax investment in accelerating clean energy, the EPA said.

Administration officials said the fund's aim is to help individuals, families and small businesses pay for projects to save energy and reduce greenhouse gas emissions, such as installing solar panels or energy-efficient appliances.

The awards, announced April 4, come from two programs within the fund, the $14 billion National Clean Investment Fund and the $6 billion Clean Communities Investment Accelerator. The first will be split among three applicants — the Climate United Fund, the Coalition for Green Capital, and Power Forward Communities — to create national financing institutions that will provide capital for clean energy projects.

The funding presents "a once-in-a-lifetime opportunity to tackle the climate crisis while building a stronger economy for all Americans," said Beth Bafford, CEO of the Climate United Fund, which received the largest award of $6.97 billion. "An equitable energy transition is the challenge of our time, and we're ready to get to work."

The Clean Communities Investment Accelerator will support five applicants in establishing "hubs" to distribute funding and technical assistance to lenders, "providing an immediate pathway to deploy projects in those communities while also building capacity of hundreds of community lenders to finance projects for years," the EPA said in a news release.

The program prioritizes low-income and disadvantaged communities, comprising more than $4 billion in grants for rural areas and nearly $1.5 billion for tribal communities.

The federal agency estimated that every public dollar spent will leverage nearly $7 in private funds over the next seven years.

Senator Ed Markey (D-Mass.), who spearheaded the Greenhouse Gas Reduction Fund, applauded the EPA for its work to "quickly stand up this critical program."

"After more than a decade of hard work, our vision to create a national climate bank is a reality," Markey said in a statement.

The EPA expects to finalize the eight awards in July, with selections "contingent on the resolution of all administrative disputes related to the competitions," the agency said.

The Greenhouse Gas Reduction Fund has been a target of the Republican-led US House of Representatives, which introduced a bill in 2023 to repeal the climate program.