OAKLAND, MARYLAND – Inflation Reduction Act Boosts Federal Spending On Renewable Energy (Photo by … [+]
Recently, Vice President Kamala Harris and Environmental Protection Agency (EPA) Administrator Michael Regan announced eight recipients of $20 billion in grant awards from the $27 billion Greenhouse Gas Reduction Fund to provide access to financing for clean-energy and climate-related projects in low-income and under-invested communities. The selections include three recipients under the $14 billion National Clean Investment Fund and five recipients under the $6 billion Clean Communities Investment Accelerator, yielding a financing network that can support Main Streets across America by providing capital for projects that cut emissions, create jobs, and attract additional private investment.
According to the EPA, the most severe harms from climate change fall disproportionately upon underserved communities who are least able to prepare for, and rebuild from impacts that include heat waves, poor air quality, and flooding. To help address this crisis, the Greenhouse Gas Reduction Fund, which is funded through the Inflation Reduction Act, will support a number of projects, including distributing clean power generation and storage and retrofitting homes and small businesses. Minority-led Community Development Financial Institutions (CDFIs) are well-positioned to distribute these funds to disadvantaged communities that have historically been overlooked for climate investments.
Lenwood V. Long, Sr., President and CEO of the African American Alliance of CDFI CEOs (The Alliance), a coalition of more than 69 CEOs of Black-led CDFIs, said, “Green energy solutions are often out of reach for Black communities. As members of the communities they serve, Alliance members can address the unmet need for green investments in these communities and ensure the GHGRF is implemented equitably.” The Alliance leads the Community Builders of Color Coalition, which founded the Justice Climate Fund, one of the selected applicants. Its network of community lenders serves 281 million Americans and includes more than 1,000 CDFIs across every state in the nation and multiple territories.“
In addition, the eight applicants selected have committed to reducing or avoiding up to 40 million metric tons of carbon pollution annually over the next seven years and creating nearly $7 of private capital for every $1 of federal funds. This effort is also part of the Biden-Harris Administration’s Justice40 Initiative, which has the goal of making 40% of the overall benefits from certain federal climate, clean energy, and other investments go to disadvantaged communities overburdened by pollution.
All of the applicants selected have a long history of serving under-invested communities. For example, Power Forward Communities is a nonprofit coalition formed by Enterprise Community Partners, LISC (Local Initiatives Support Corporation), Rewiring America, Habitat for Humanity, and the United Way that is dedicated to decarbonizing and transforming American housing to save homeowners and renters money and reinvest in communities. The Opportunity Finance Network is a 40-year-old nonprofit community development financial institution (CDFI) intermediary that provides capital for a national network of more than 400 community lenders that serve all 50 states, the District of Columbia, and several U.S. territories.
“The selectees announced today will deliver transformational investments for American communities, businesses, and families and unleash tens of thousands of clean technology projects like putting solar on small businesses, electrifying affordable housing, providing EV loans for young families, and countless others. That translates to good-paying jobs, energy bill savings, and cleaner air,” said EPA Administrator Michael Regan.
There are also other organizations helping communities and small businesses prepare for climate change and the future. For example, Mastercard Strive USA connects small businesses to the support they need to help them get capital, go digital, and grow their networks. One of their partners is Community Reinvestment Fund, USA, which is taking steps to address social and economic inequity through new financial solutions that help build sustainable communities.
Stemming the effects of climate change and helping underserved communities transition to cleaner energy will not happen overnight and requires continued, purposeful effort. This program is a strong step in making Main Streets stronger, by preparing them for the future and hopefully giving them the strength to weather unforeseen natural disasters.