‘Business as usual:’ Why the $27B ​‘green bank’ could survive Trump

One of the Inflation Reduction Act’s most celebrated programs — a nationwide ​“green bank” to help fund climate projects that struggle to secure private-sector loans — has also been one of the most reviled by Republican lawmakers.

Last October, House Republicans dogged the U.S. Environmental Protection Agency over its management of the program, known as the Greenhouse Gas Reduction Fund (GGRF), calling it a “$27 billion slush fund of taxpayer money.” In January, they accused the Biden administration of directing the money to ​“favored special interest organizations.” House Republicans have also seized on a report from the EPA’s Office of Inspector General stating that the speed at which the program was moving could lead to ​“waste, fraud, and abuse.”

But the green bank program appears to be well positioned to survive the next four years, despite the fact that Republicans won control over Congress and the presidency earlier this month. That’s assuming the Trump administration follows the law and regulations that established the program, however — and in any case, the administration will still have opportunities to slow the program down.

“As a Democrat, of course I’m disappointed” in the election results, Reed Hundt, head of the Coalition for Green Capital (CGC), one of the entities in charge of allocating green bank funds, told Canary Media. ​“But as the CEO of CGC, there’s no change at all in what we’re going to do. It’s completely and totally business as usual.”

Hundt, the U.S. Federal Communications Commission chair during the Clinton administration, is a longtime champion of a national green bank.

More than a decade of work on the concept paid off in 2022 with the inclusion of a green bank program in the landmark IRA climate law. The idea is to create a nationwide version of the government-backed and nonprofit green banks now operating in 17 states, offering low-cost loans for rooftop solar, efficiency retrofits, electric heat pumps, EV charging, and similar carbon-cutting projects.

The law gave the EPA $27 billion to grant to states, tribes, nonprofit groups, and public-private consortiums. Those grantees, in turn, can lend or grant funds to projects and initiatives across the country — and bring in other private-sector lenders and financial backers to boost the impact of the money.

In April, the EPA picked eight coalitions to receive a collective $20 billion of this green bank capital, including $5 billion for the CGC. That month, the EPA also picked 60 recipients for its $7 billion Solar for All program. And in August, the EPA announced it had ​“obligated the full $27 billion” of its GGRF funds to selected recipients.

That means that CGC now has ​“a contract with the government that tells us and our network partners what we must do,” Hundt said. ​“We have the money, and we’re going to fulfill the contract.”

Having these funds ​“obligated” is important, said Adam Fischer, vice president at Waxman Strategies, a Washington, D.C.–based policy and lobbying firm founded by Henry Waxman, a former Democratic U.S. House member. Under the statutory language of the IRA, once GGRF funds are obligated, ​“EPA is now under contract with all 68 awardees” across all of its programs, he said.

“As such, any attempt by the incoming administration to claw back or otherwise upend disbursement of obligated funds would be a breach of contract,” said Fischer, who led development and drafting of the GGRF while working at the U.S. House Committee on Energy and Commerce. ​“If they do try to meddle with contracts for unjustifiable reasons, they’ll face lawsuits.”

That view was echoed by Michael Catanzaro, the CEO of CGCN Group, a Republican lobbying firm, and a former special assistant for domestic energy and environmental policy in the first Trump administration.

“It’s going to be difficult, I think, for an EPA to come in and claw that back,” Catanzaro said during a November 14 panel discussion hosted by the law firm Norton Rose Fulbright. ​“I think you’re going to create some serious legal problems if you try to do that. […] EPA worked pretty diligently to get the money out the door, knowing that the election could go south on them.”

The future of the green bank under Trump

That’s not to say that the GGRF won’t face attacks from the Trump administration or the Republican-controlled Congress, however. The program has ​“been a long-standing target of House Republicans and Republicans generally in the Congress since the IRA was finalized and EPA began work to figure out where that money would go,” Catanzaro said.

Though the Trump administration may not be able to outright eliminate the GGRF program, several people who spoke to Canary Media on condition of anonymity said that the EPA under Trump could take actions to disrupt it, such as refusing to approve loans made by recipients. Those actions could be legally challenged, they said — but those disputes would take time to play out, leaving financing from the program in an extended state of limbo.

In the face of that risk, the program’s best defense may be its value to communities in Republican-dominated states and congressional districts.

“We’re going to be creating at least one economically self-sufficient green bank in every state,” Hundt said of CGC’s plans. This will direct a significant portion of funds to Republican states and congressional districts, he said. For example, CGC expects to fund a green bank in Ohio, the state represented by Vice President–elect J.D. Vance, he said.

Fischer highlighted that the GGRF program by law must ​“direct money to rural communities, energy communities, which will by default result in a large focus on red places, just because of where the mapping shows those communities are located.”

“The awardees are starting to make investments, and that’s going to accelerate in the coming weeks and months and years. And a lot of those investments by statute are going to go to red and purple states and districts,” he said.

The same goes for the Solar for All program, which is directing money to small-scale solar projects across the country, said Michelle Moore, CEO of Groundswell. The nonprofit received $150 million of the $750 million in Solar for All funds for work in Georgia, North Carolina, Florida, Tennessee, and South Carolina.

“Given the statutory focus of the program, nowhere stands to benefit more from Solar for All than small towns across rural America,” Moore told Canary Media. ​“Plus, the Southeast needs every electron it can get to meet its surging energy demand.”

So far, the loans from GGRF grantees have been spread across both blue and red states. The first financing from the program was a $31.8 million loan for Scenic Hill Solar, a Little Rock, Arkansas–based solar developer, to build distributed solar projects for the University of Arkansas system. The loan was made in October by Climate United, a consortium that received $7 billion from the EPA.

Climate United has also committed $250 million in financing to order up to 500 U.S.-built Class 8 electric trucks — the largest such order of electric trucks in the country — for small freight companies and independent truckers, starting with those serving California’s busiest and most heavily polluted seaports.

Earlier this month, CGC announced its first two financings from its $5 billion in GGRF funds. The first is a $100 million line of credit to Coventry Structured Investments to implement energy efficiency and clean energy upgrades to commercial properties in California, Maryland, Rhode Island, and Texas. The second is a $75 million loan for Highland Electric Fleets, a company supporting electric school bus deployments in school districts across the country.

CGC expects these financing structures will enable roughly $1.2 billion in total public and private-sector investment. That’s a key feature of the GGRF model, which uses public funding to reduce the financial risks of a project in order to lure private-sector lenders into markets that have yet to establish a track record.

“Coventry is primarily about lowering the electricity bill for small businesses,” Hundt said. Energy efficiency has historically been a tough market for investors, but CGC hopes that its $100 million line of credit will ​“cause investment of 10 times the amount we contributed,” he said.

Community solar projects, energy efficiency upgrades, and electric vehicles aren’t novel or untested technologies, Fischer highlighted. Rather, banks simply haven’t offered loans for these technologies in the communities that the GGRF program is targeting.

“It’s not like there’s a lack of capital out there,” Fischer said. ​“It’s just that the capital isn’t going into certain places.”

Nor are private-sector lenders locked out of making money by GGRF loans, said Beth Bafford, CEO of Climate United. As she told Canary Media last month, Climate United’s bulk order of electric big-rig trucks will help establish the resale value of electric trucks that banks are loath to finance today.

“We can get those vehicles sold over time, establish secondary market values, and start to establish that residual value data” so that​“traditional capital can come in and take it from there,” she said.

Hundt pointed to a similar dynamic playing out for CGC’s loan to Highland Electric to support electric school bus deployments already being funded by the EPA’s Clean School Bus Program.

Offering lower-cost financing for these electric school bus deployments means ​“school districts are going to pay less for transportation,” Hundt said. ​“If your view is that school districts are spending too much money, you want them to work with Highland to help them pay less. If your view is that property taxes should be lowered to pay less for education, then you like what Highland is doing.”