Two new financing programs make up the lion’s shares of $27B Greenhouse Gas Reduction Fund, which was created by Inflation Reduction Act.
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The Biden administration has opened two new competitive grant programs for financial firms to receive up to $20 billion to lend to clean energy projects around the country.
The programs, launched on July 14, are parts of the $27-billion Greenhouse Gas Reduction Fund, a major component of last year’s Inflation Reduction Act, also known as the Climate Act. The U.S. Environmental Protection Agency is managing the fund’s programs.
The fund’s congressional advocates describe it as a “climate bank” or a “green bank.” The fund does not provide funds directly to engineering or construction firms or state infrastructure or energy agencies. Instead, it seeks to use its grants to draw private capital to finance a range of projects that would trim carbon emissions.
Vice President Kamala Harris, in announcing the program on July 14 at Coppin State University in Baltimore, said that the $20 billion would go to “a national network of nonprofits, community lenders and other financial institutions to fund tens of thousands of climate and clean energy projects across America.”
But the Greenhouse Gas Reduction Fund’s supporters face opposition from Republicans on the House Appropriations Committee. The GOP lawmakers moved a spending bill through subcommittee on July 13 that would rescind $7.8 billion from the carbon-reduction fund.
The fund has three programs. The two just opened for applications are the $14-billion National Clean Investment Fund and the $6-billion Clean Communities Investment Accelerator.
The investment fund will award grants to two or three environmentally oriented financial organizations. They in turn would link with lenders to fund projects.
Stimulating clean-energy projects in low-income or disadvantaged communities is a key goal of the all of the Greenhouse Reduction Fund’s programs.
Jahi Wise, senior adviser and acting director of the Greenhouse Gas Reduction Fund, said in a statement, “Investments like this one will expand opportunities for the communities that have too often been left out and left behind.”
At least 40% of the clean investment fund dollars and 100% of the clean communities accelerator program funds would go toward projects in such areas.
The accelerator’s $6 billion would provide grants for two to seven “hub nonprofit organizations. Those entities would provide funds and technical help to “public, quasi-public, not-for-profit and nonprofit lenders in low-income and disadvantaged communities.
Another senior administration official told ENR via email, “The grant awards made under the National Clean Investment Fund competition will be available to finance clean technology projects, both big and small.”
According to the funding-availability notice for the program, funds are to go to “projects, activities or technologies” that “reduce or avoid emissions of greenhouse gases” and “emissions of other air pollutants.”
The two newly announced programs follow the Greenhouse Gas Reduction Fund’s $7-billion “Solar for All” grant program, which began taking applications on June 28. That program focuses on increasing residential solar installations.
The application deadline for the clean investment fund and the investment accelerator is Oct. 12. Officials anticipate selecting the winners by March 2024, with grantees starting work as early as July 2024.
Tom Ichniowski has been writing about the federal government as ENR’s Washington Bureau Chief since the George H.W. Bush administration, and he has covered at least five major highway bills. A recognized expert on government policy on infrastructure and regulation, Tom is also a Baltimore native and Orioles fan who grew up rooting for Brooks and Frank Robinson. He is a graduate of Columbia College and Columbia’s graduate school of journalism, where he once used “unrelentless” in a headline.
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