Update on the Greenhouse Gas Reduction Fund

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As we have previously reported, the Inflation Reduction Act (IRA) of 2022 provided the U.S. Environmental Protection Agency (EPA) with $27B for the new Greenhouse Gas Reduction Fund (GGRF). This Fund will leverage public investment with private capital to finance clean energy projects that reduce electricity bills, create jobs, and reduce air pollution. By statute, at least $15 billion must help low-income (LI) communities and disadvantaged communities (DACs).

Unlike a typical grant program, EPA will not provide grants directly to projects. Rather, it will provide grants to eligible states, tribes, territories, municipalities and nonprofit entities, and those grantees will ultimately provide the financial assistance to communities for deployment of emissions and air pollution reducing projects. EPA intends for the GGRF to enable communities, small businesses, and individuals to seek financing from the broad range of financial institutions that will be direct and indirect recipients of GGRF awards including National Clean Investment Fund nonprofits, local community financing entities, and LI and DAC solar programs, and more.

The funding will be administered through three separate competitive grant processes:

· a $14B National Clean Investment Fund that will fund 2-3 national nonprofits that will partner with private capital providers to deliver financing at scale to businesses, communities, community lenders, and others. At least 40% of the funds from the National Clean Investment Fund will be dedicated to LI and DACs, including those that are rural communities, Tribal communities, communities with environmental justice concerns, energy communities, and persistent poverty counties.

· a $6B Clean Communities Investment Accelerator will fund 2-7 hub nonprofits that will build the clean financing capacity of specific networks of lenders, including community development financial institutions (CDFIs) (including Native CDFIs), credit unions, green banks, and housing finance agencies. 100% of the funds from the Clean Communities Investment Accelerator will be dedicated to LI and DACs.

· a $7B Solar for All competition will provide up to 60 grants to States, Tribal governments, municipalities, and nonprofits to help prime LI communities and DACs for residential and community solar investment.

As of July 14, 2023, applications are open for all three GGRF subprograms. Learn more about key dates and deadlines here.

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