When a new clean energy project is tough to finance, a green bank sometimes steps in to help. Using public capital, these institutions can provide loans and encourage private investment.
Alex Kragie is director of the American Green Bank Consortium.
“We’re not in the business of competing directly with private capital,” he says. “For example, we are not interested in financing a solar farm that’s being built in the Nevada desert. There’s plenty of attractive financing available for those types of projects. What we do focus on is the projects that have some hesitation from private sector lenders. So maybe that solar panel installation in the Nevada desert has an energy storage component that is making lenders a little nervous. Green banks can step in and jump into the capital stack and get to a point where lenders are comfortable with the project, turning the project from a red light to a green light.”
Efforts by members of the American Green Bank Consortium have collectively led to over $5 billion of new clean energy investments. But Kragie says a lot more is still needed.
“It sounds nice, and we’re proud of it,” he says. “But we’ve got to tack on some zeroes to the end of that – fast – if we want to do anything about actually tackling the problem of climate change.”
Reporting credit: ChavoBart Digital Media.