US should help capitalize state green banks, says Brookings report
In Washington, the Brookings Institution released a report calling on the Federal Government to help capitalize and scale up the new state-level green banks by smoothing their access to relevant federal dollars.
“Support requires no major change of policy,” the report authors say. “Instead, it requires mostly administrative action: clarifications of definitions, clarifications of eligibility, and some modest red tape reductions. Numerous eligibility issues and definitions need clarifying about the use of literally billions of Department of Energy loans and loan guarantee dollars. Improved, quicker access to these funds could be a great help in capitalizing green banks. Similarly, a few borrower-eligibility and use clarifications—as well as moderation of excessive security rules—could turn several programs within the Department of Agriculture’s gargantuan Rural Utility Service into another source of capital for low-cost green bank financing.
The report highlighted that Rhode Island just authorized its own public-private green and other infrastructure bank, joining Connecticut, New York, Hawaii, and California. In addition, a half-dozen other states are exploring how to leverage public money with private to finance low-carbon technology.
“The states are working out a smart, “bottom-up” response to a major national challenge. And yet, now the states’ self-help is running up against an avoidable obstacle: the lack of public dollars available to seed the creation or expansion of new banks. In state after state, strong interest in green banking or strong demand for green bank products has collided with the limited resources available to capitalize the new institutions.”
Category: Policy
