The Biden administration announced the launch of two new programs through the U.S. Environmental Protection Agency (EPA) and totaling $20 billion, aimed at financing climate and clean energy projects at the community and small business level.
The new programs are being established under the Greenhouse Gas Reduction Fund, created through last year’s Inflation Reduction Act, and designed to mobilize financing and private capital to combat climate change. The fund consists of three programs, including the two new initiatives, and a $7 billion program launched last month to deploy residential and community solar projects, with a focus on low-income communities.
In a speech at Baltimore’s Coppin State University announcing the new program, Vice President Kamala Harris said:
“For years, one of the missing pieces in our strategy to fight the climate crisis is that we have not invested at scale in community climate action… Today, I am proud to announce the largest investment in financing for community-based climate projects in our nation’s history.”
The new programs include the $14 billion National Clean Investment Fund, which will provide grants to new national non-profit clean financing institutions to partner with the private sector in providing capital to fund tens of thousands of clean technology projects in homes, businesses and communities. According to the EPA, at least 40% of the funds from the program will be dedicated to low-income and disadvantaged communities.
The administration also launched the $6 billion Clean Communities Investment Accelerator, which will provide funding and technical assistance to local build the clean financing capacity of community lenders, such as community banks, with 100% of the program’s funds dedicated to low-income and disadvantaged communities.
According to Vice President Harris, types of projects that could be funded under the new programs could include providing capital to construction companies to enable the installation of energy-efficient appliances in new housing projects, or helping small business owners receive zero-interest loans to electrify a delivery fleet.
The Biden administration has made climate action a key focus, beginning with the return of the U.S. to the Paris Agreement on the president’s first day in office, committing the country to achieve net zero by 2050, and following up with an interim target to reduce economy-wide greenhouse gas (GHG) emission by 50-52% in 2030.
“The investment we are announcing today will help us to achieve these goals, and it will do so much more, because think also about the impact on not only the local economy, not only on an investment in the entrepreneurs and innovators from and in the community.”