Green Banks Adapt to Funding Cuts Amid Ongoing Climate Initiatives

Green banks are organizations that leverage public funds to enhance lending for renewable energy and climate adaptation in hard-to-finance sectors. Dan Adler, executive director of the U.S. Green Bank 50, which includes 56 green banks and other entities, emphasized the need to adapt to this challenging environment. To compensate for the loss of federal funding, they have sought collaborations with commercial banks, credit unions, and philanthropic backers. “We’re making a virtue out of a necessity,” Adler noted.

In its inaugural impact report released in September, the Green Bank 50 detailed the achievements of its members over the past two years. The report highlighted that these organizations contributed approximately $1.4 billion of their own capital and attracted an additional $11 billion in private funding for more than 40,000 projects.

Among the notable projects is a $10 million community solar array in New Orleans, financed by Inclusive Prosperity Capital, the United Church of Christ Cornerstone Fund, and Pelican Community Capital. This project aims to provide reduced utility bills for up to 350 low-income households.

Inclusive Prosperity Capital CEO Kerry O’Neill expressed hope that recent court decisions would enable a return to their important work, despite the setbacks caused by the funding freeze.

One specific initiative affected by these funding cuts is the Climate United Fund, which received $7 billion but had its funds frozen, hindering plans for financing U.S.-built electric trucks and clean energy projects for Native American communities.

Adler pointed out that while the surveyed green banks have approximately $6.8 billion in funding pipelines, the absence of federal funding has made some projects infeasible. He stated, “When money is coming down from the sky at basically 0% [interest], you can do very interesting projects — and we’re prepared to do that again.” Now, the focus is on strict discipline with private capital as a primary resource.

The green bank movement began in Connecticut and New York in the 2010s and has proven effective in driving private investment for energy efficiency and electrification projects. Adler emphasized that while the technologies financed by green banks are not inherently risky, the demographics they serve—such as affordable housing providers—can present unique challenges.

To mitigate risks, green banks have developed strategies such as bundling loans from multiple lenders, which was how they financed the community solar project in New Orleans. Similarly, the New York City Energy Efficiency Corp. supported a $4.5 million predevelopment loan for an all-electric affordable housing project in Salt Lake City.

Resource sharing among green banks has also contributed to reduced financing costs. The Solar and Energy Loan Fund in Florida, which has financed nearly $80 million in energy projects, created a platform to standardize underwriting processes, benefiting 13 other green banks.

Montgomery County Green Bank in Maryland introduced a $4 million initiative to provide low-interest loans for renewable energy projects, emphasizing the growing need for affordable financing as utility bills rise.

Adler reaffirmed the importance of mobilizing investment in the current market, noting that many green banks operate with limited annual budgets. “We could do a lot more,” he said, while highlighting the challenges they continue to navigate.

A correction was made on October 12, 2026, clarifying the description of Pelican Community Capital.