We advocate for using modest amounts of government funding to leverage private financing for energy efficiency and renewable energy projects through what are known as “green banks.” These innovative finance institutions wring the risk out of clean energy lending for private banks, drawing them into loans they would not otherwise participate in.
A green bank in Alaska would keep precious energy dollars in local communities, create jobs and make Alaska a more resilient place to live.
World oil prices have never recovered from their collapse in 2014. Without new state revenues, Alaska’s ability to continue to grant fund renewable energy and energy efficiency programs and projects has effectively ended, with no significant legislative appropriations for clean energy since 2017.
Instead of relying on grants, many other jurisdictions are successfully using modest amounts of government funding to leverage private financing for energy efficiency and renewable energy projects through what are known as “green banks.” These innovative finance institutions wring the risk out of clean energy lending for private banks, drawing them into loans they would not otherwise participate in. By offering credit enhancements such as loan-loss reserve accounts to private lenders, green banks are able to design loan programs with much lower interest rates and longer repayment periods, allowing borrowers to save more on their energy bills than their monthly loan payment.
Since late 2016, we have been educating policy and business leaders about how green banks work, including testimony in front of the state legislature and meetings with government officials and private banks.
We have been consulting with the chief investment officer of the highly successful Connecticut Green Bank who has visited Alaska three times to help REAP socialize the green bank concept. We are also working with the Coalition for Green Capital, a New York-based think tank that is helping accelerate the green bank movement across the country.
On April 9, 2021, Governor Dunleavy introduced legislation that would create a statewide green bank. The legislation is titled the Alaskas Energy Independence Program & Fund and is SB123 in the Senate and HB170 in the House. Both bills have been referred to their respective Finance Committees, and we are working to progress the legislation and put it in the best position to be signed into law this year.
If you’d like to support us in moving the bill forward, contact us about writing a formal letter of support or calling your legislators!
Read REAP’s whitepaper on how green banks can help Alaska. Or for more detailed information on how green banks work, read this white paper from the Coalition for Green Capital.