Biden administration to split green bank funds between national and ‘hub’ organizations

The Biden administration is expected to announce Friday how it will dole out funds for climate-friendly projects from the Democrats’ Inflation Reduction Act (IRA) — splitting it up between national financing institutions and “hub” nonprofits.

The announcement — which will come during an event in Baltimore with Vice President Harris — is the latest window into how climate funding from the IRA will be spent.

A total of $20 billion which was previously announced as funding to help financial institutions with projects that cut pollution and energy costs will be split up among the two types of projects. 

Most of the money, $14 billion, will go toward two or three nonprofit national financing institutions to help pay for climate-friendly technology. 

A press release said that ultimately, these institutions will help families, nonprofits, governments, small businesses and others to get access to money they can use to deploy projects that help fight climate change. 

At least 40 percent of this bucket of funding will go toward low-income or disadvantaged communities. 

The other $6 billion will support between two and seven “hub nonprofit organizations,” the press release said. These organizations will provide funding to help community lenders like credit unions, green banks and community development financial institutions finance clean technology projects.  

All of the $6 billion will go toward low-income and disadvantaged communities. 

“Students, small business owners and community leaders with innovative ideas to reduce our emissions and accelerate our clean energy transition will now see their projects become reality, all while creating good-paying jobs and a clean energy economy that works for all,” Harris said in a written statement.  

The funds come in addition to $7 billion that the administration has said will go to help low-income communities get access to residential solar energy. 

All of the funding has been scrutinized by Republicans, who criticized it as a “slush fund” and proposed to repeal it.