Green Banks Steer Federal Cash to Climate Projects
Green Banks are a new channel for Alaska entrepreneurs to leverage federal funding for ventures related to clean energy and climate resilience.
Earlier this month, the community development nonprofit for Southeast, Spruce Root, announced a strategic partnership with the Coalition for Green Capital (CGC). Spruce Root joins CGC’s nationwide network of investors and lenders preparing to apply for money from the US Environmental Protection Agency’s Greenhouse Gas Reduction Fund (GGRF).
“We’re thrilled to enter this partnership with CGC and support the launch of a nationwide green bank to unlock billions in public-private capital for clean energy and climate resiliency investments in our state,” says Alana Peterson, executive director of Spruce Root. “The green bank model has proven to be a successful tool for unlocking private capital, delivering projects that reduce emissions, easing the economic and environmental burdens on families, and supporting good paying jobs.”
Green Banks received major stimulus thanks to $370 billion in climate-related funds through the Inflation Reduction Act of 2022 and the $1.2 trillion Bipartisan Infrastructure Law. Green Banks administer federal funds as a lower-cost source of funding to finance projects that reduce climate-warming emissions.
“We can develop a more equitable, resilient, and sustainable future by closing the gap between climate resiliency projects and access to capital, especially in Alaska’s low- to moderate-income communities, many of which are already struggling to manage the impacts of a rapidly changing environment,” says Chad Smith, a Wall Street veteran who helped the Valdez Native Tribe establish Alaska’s first nonprofit Green Bank, Alaska Green Capital (AGC), last year.
“We’re looking forward to serving our fellow Alaskans by providing capital to help them switch to more cost-efficient energy solutions and energizing Alaska’s green and blue economy,” says AGC’s board chair James Ujioka.
AGC is raising funds to begin its lending program this fall. The Valdez Native Tribe has already been awarded its first philanthropic grant from the Rasmuson Foundation, the state’s largest private grantmaker, to aid the startup of AGC. AGC is working to capitalize its inaugural lending programs, targeting energy efficiency in homes, businesses, and public facilities throughout rural Alaska.
“We are committed to enhancing our collective stewardship of our natural environment in the spirit that our ancestors and forebears have carried for thousands of years,” Ujioka says. “The environment, good health, and economic livelihoods of tomorrow’s Alaskans are impacted by the decisions and actions we take today. We will collectively benefit by the deployment of clean energy technology and projects that result in better environmental stewardship and outcomes.”
The mission and vision of the 750-member Valdez Native Tribe parallels Spruce Root’s activities in Southeast. Spruce Root provides small business lending, technical and educational resources, and coaching programs to communities and small businesses as they work to drive towards a regenerative economy.
Peterson says, “As the federal government prepares to make the largest clean energy investments of our lifetime, we are determined to deliver these funds to where they are needed most, which is to the underserved communities and families greatly impacted by the climate crisis.”
The recently announced program design for the GGRF aims to steer funds and projects to low-income and disadvantaged communities and mobilize private capital to stimulate additional deployment of resources.
“We thank Spruce Root for the opportunity to work together alongside our coalition of clean energy lenders and in support of the nationwide green bank,” says Eli Hopson, executive director and COO of CGC. “Our network has already identified an initial pipeline of green projects valued at $13 billion in public-private capital over the next several years, and we are prepared to leverage the GGRF to unlock even more funds. With the expertise of community organizations like Spruce Root, our network and the nationwide green bank will be best positioned to quickly make an impact and deliver on projects spearheaded and supported by local communities.”