The Greenhouse Gas Reduction Fund (GGRF) is a historic new EPA program created by President Biden’s Inflation Reduction Act. This first-of-its-kind, national-scale program will provide nearly $27 billion in competitive grants to mobilize financing and leverage private capital for clean energy and climate projects that reduce pollution – with an emphasis on projects that benefit low-income and disadvantaged communities. As a longtime community lender and certified CDFI, Locus is already well-suited to collaborate as an intermediary in this unprecedented opportunity to collectively advance climate solutions and resilience by bringing all its resources to bear, including Locus Impact Fund, Locus Bank, and the Community Investment Guarantee Pool, or CIGP.
The Greenhouse Gas Reduction Fund has the following program objectives:
- Reduce emissions of greenhouse gases and other air pollution.
- Deliver benefits of greenhouse gas- and air pollution-reducing projects to American communities, particularly low-income and disadvantaged communities.
- Mobilize financing and private capital to stimulate additional deployment of greenhouse gas- and air pollution-reducing projects.
The Greenhouse Gas Reduction Fund will be implemented via three grant competitions that will lower energy bills, reduce pollution, and leverage private capital to combat climate change and create economic opportunity for American communities.
- National Clean Investment Fund (NCIF): This $14 billion fund will award grants to up to three national nonprofits to enable partnerships with the private sector to provide financing for clean technology projects.
- Clean Communities Investment Accelerator (CCIA): The CCIA ill award grants to 2-7 nonprofit organizations, which will distribute $6 billion and offer technical assistance to enhance the clean financing capabilities of local community lenders, with a focus on underinvested communities.
- Solar for All (S4A): S4A will award $7 billion, totaling 60 grants, to states, territories, Tribal governments, localities, and nonprofit recipients. These grants aim to increase the capacity for solar investment in low-income communities, creating a new nationwide program providing millions of households with affordable clean energy access.
While the EPA will allocate a small number of awards for each competition, applicants have been strongly encouraged to work in coalitions to apply for and receive funding. In true spirit of partnership, Locus has submitted 10 letters of support to coalitions submitting applications to all three competitions. Some of those coalitions include:
Climate United – Calvert Impact, Community Preservation Corporation, and Self-Help are joining forces to form Climate United, a consortium that will compete to manage an award from the $14 billion National Clean Investment Fund (NCIF), a component of the Greenhouse Gas Reduction Fund (GGRF).
Coalition for Green Capital – The Coalition for Green Capital (CGC) seeks a total of $11.9 billion through four applications to the three separate programs within the GGRF. CGC will use the funds to make direct investments and to fund a network of partners consisting of 16 state and local green banks and two national non-profit investors (obtaining a “sub-award” of CGC’s award) and an ever-expanding big green tent of a total of 191 partners, including developers, community benefit organizations, community lenders, and commercial and financial firms.
Justice Climate Fund – The Justice Climate Fund is a nonprofit that provides capital, leverages resources, and supports zero-emission technologies in underserved communities across the country. JCF is founded by the Community Builders of Color Coalition. It is steered by a Board that includes the African American Alliance of CDFI CEOs, the National Association for Latino Community Asset Builders, Inclusiv, National Bankers Association, Oweesta Corporation, Opportunity Finance Network, Partners for the Common Good and the Community Development Bankers Association, ImpactAssets, the Housing Partnership Network, and Connecticut Green Bank. They have come together to ensure that all communities equitably benefit from the GGRF. JCF has submitted applications under both the NCIF and CCIA programs.
Green Bank for Rural America – Appalachian Community Capital (ACC) is requesting $1 billion from the CCIA program to catalyze green energy investments in low-income rural communities impacted by declines in the fossil fuel industry. To accelerate economic restructuring and diversification in these communities, ACC has established the Green Bank for Appalachia, Energy Communities, and Underserved Rural America (or Green Bank for Rural America for short), a place-based effort that will be a hub for investment and technical assistance to community lenders, local leaders, and workforce development partners across the United States.
CDFIs and other mission-driven community lenders like Locus are perfectly positioned to finance a just clean energy transition through the Greenhouse Gas Reduction Fund. We understand that underserved communities require climate financing products that not only reduce greenhouse gas emissions, but also build wealth, create sustainable quality jobs, and a provide better standard of living for all.
Funds from the Greenhouse Gas Reduction Fund will begin to flow to CDFIs, MDIs, Green Banks, and other community lenders in 2024 and 2025, and Locus stands ready with our partners to tackle the climate crisis while building a stronger economy for all Americans.