The Biden administration has opened two new competitive grant programs for financial firms to receive up to $20 billion to lend to clean energy projects around the country.

The programs, launched on July 14, are parts of the $27-billion Greenhouse Gas Reduction Fund, a major component of last year's Inflation Reduction Act, also known as the Climate Act. The U.S. Environmental Protection Agency is managing fund programs.

Congressional advocates describe the fund as a “climate bank” or a "green bank." It does not provide funding directly to engineering or construction firms or state infrastructure or energy agencies. Instead, it seeks to use its grants to draw private capital to finance a range of projects that would trim carbon emissions.

Vice President Kamala Harris, in announcing the program on July 14 at Coppin State University in Baltimore, said the $20 billion would go to "a national network of nonprofits, community lenders and other financial institutions to fund tens of thousands of climate and clean energy projects across America."

But supporters face opposition from Republicans on the House Appropriations Committee. GOP lawmakers moved a spending bill through subcommittee on July 13 that would rescind $7.8 billion from the carbon-reduction fund.

The fund has three programs. The two just opened for applications are the $14-billion National Clean Investment Fund and the $6-billion Clean Communities Investment Accelerator.

The investment fund will award grants to two or three environmentally oriented financial organizations. They in turn would link with lenders to fund projects.

Focus on Disadvantaged Communities

Stimulating clean-energy projects in low-income or disadvantaged communities is a key goal of the all of the Greenhouse Reduction Fund's programs. 

“Investments like this one will expand opportunities for the communities that have too often been left out and left behind,” Jahi Wise, senior adviser and acting director of the Greenhouse Gas Reduction Fund, said in a statement.

At least 40% of clean investment fund dollars and 100% of the clean communities accelerator program funds would go toward projects in such areas. 

The accelerator’s $6 billion would provide grants for two to seven “hub nonprofit organization that would provide funds and technical help to “public, quasi-public, not-for-profit and nonprofit lenders in low-income and disadvantaged communities.

Another senior administration official told ENR via email, "The grant awards made under the National Clean Investment Fund competition will be available to finance clean technology projects, both big and small."

According to the program's funding-availability notice, funds would go to “projects, activities or technologies” that “reduce or avoid emissions of greenhouse gases” and "emissions of other air pollutants.”

The two newly announced programs follow the Greenhouse Gas Reduction Fund’s $7-billion "Solar for All" grant program, which focuses on increasing residential solar installations and began taking applications on June 28.

The application deadline for the clean investment fund and investment accelerator is Oct. 12. Officials anticipate selecting the winners by March 2024, with grantees starting work as early as July 2024.