EPA Energy Resources for State and Local Governments

Green banks are public, quasi-public, or nonprofit financing entities that leverage public and private capital to pursue goals for clean energy projects that reduce emissions. Generally, state and local policymakers use green banks to deliver projects that are not sufficiently met by other financial markets and to achieve desired economic development or public benefit outcomes. Green banks deploy various financial services such as credit enhancements and co-investments to leverage private capital to achieve its objectives. In some cases, green banks can offer subsidized loans at interest rates lower than typical market offerings, or they can take on risks that the market is not currently accepting by offering loans to customers who do not meet the credit requirements of other lenders. In other cases, green banks provide support to other lenders, which can either be financial or procedural, to lower barriers for these lenders in markets that are currently underserved.

By focusing on underserved market sectors, green banks can complement existing clean energy programs by targeting market gaps. They can address existing barriers that otherwise prevent the expansion of clean energy, particularly within underserved communities. Many green banks have tailored their programs to improve access to clean energy projects for low- and moderate-income (LMI) communities.

Learn more at EPA’s website.