The clean energy movement is in full swing, and small businesses are at the center of it. As the Greenhouse Gas Reduction Fund (GGRF) takes effect, community lenders and CDFIs have several opportunities to set small businesses up for sustainability success.
What is GGRF?
GGRF is a program administered by the Environmental Protection Agency to fund projects in local communities to address climate change. The $27 billion allocated to the fund will be disbursed to capital providers so they can support these projects and help communities transition to clean technology.
How Does GGRF Financing Work?
GGRF is split into three programs. The first is the National Clean Investment Fund (NCIF). Through this program, three nonprofits were awarded funding. These nonprofits will pass funds onto community lenders and other similar organizations to finance local, qualified clean energy projects.
The second program is the Clean Communities Investment Accelerator (CCIA). The goal of this program is to ensure that the clean energy transition is equitable by making it accessible to disadvantaged communities. CCIA also awarded funding to three nonprofits, but the funds will be disbursed specifically to community lenders in low-income communities. Like NCIF, these lenders can then finance local, qualified projects.
Finally, Solar For All (SFA) provided funding to many awardees to enable low-income communities to expand their investment in residential and community solar projects. In this program, funds will go directly from the initial awardees to these projects.
Community Lenders and GGRF
The main recipients for all three programs are now working on their plans to disburse the funds. These awardees are expected to begin rolling out programs sometime in the second half of 2024, opening opportunities for community lenders to become subrecipients.
Lenders can benefit from two of these programs – NCIF and CCIA – because both include plans to fund community lenders. By applying to be subrecipients of these programs’ awards, lenders can acquire financing to support the clean energy transition in their communities.
Once community lenders are awarded funding, they can disburse it to small businesses through grants and loan programs. Whether they’re financing clean technology contractors or innovators, or other small businesses looking to make the transition, they have the power to make a significant impact.
Together, community lenders and small businesses can become leaders in climate action.