The Biden Administration has announced the allocation of USD20 billion in awards to help fund climate and clean energy projects across the US. The investment is made possible through the Environmental Protection Agency’s (EPA) USD27 billion Greenhouse Gas Reduction Fund, which is funded through the Inflation Reduction Act.

Low interest loans to finance the implementation of clean technologies

The funds will provide low interest loans that are aimed to help plug gaps between public and private funding. They will focus on low income disadvantaged low-income communities, an area that frequently poses challenges to the adoption of clean technologies. The Greenhouse Gas Reduction Fund represents the largest allocation of non-tax funds within the Inflation Reduction Act. The capital will support a range of projects from renewable energy generation and storage to the installation of chargers, to retrofitting homes to reduce the carbon footprints.

The USD20 billion will be utilised through two programs, USD14billion to the National Clean Investment Fund (NCIF) and USD6 billion to the Clean Communities Investment Accelerator (CCIA) which in turn will award money to eight nonprofit organisations. These organisations have committed to matching USD7 of private capital for every USD1 of federal funds, leveraging in total USD150 billion.   

The USD14 billion from the NCIF will be spread across three funds:

•            Climate United Fund – USD6.97 billion

•            Coalition for Green Capital – USD$5 billion

•            Power Forward Communities – USD$2 billion

The USD6 billion available to the CCIA will be spread across five groups:

•            Opportunity Finance Network – USD2.29 billion

•            Inclusiv – USD1.87 billion

•            Native CDFI Network –  USD400 million

•            Justice Climate Fund – USD940 million

•            Appalachian Community Capital – USD500 million

Rho’s Evaluation

With the size of the funding package, the program has the potential to significantly drive the adoption of clean technologies as well as addressing socioeconomic disparities, a key goal of the Biden administration. The funding builds on multiple other initiatives the EPA has introduced under the Biden presidency.

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Source: The White House