The Biden administration’s recently announced $20 billion clean energy investment marks another significant effort to combat climate change under the Inflation Reduction Act of 2022 (IRA). Vice President Kamala Harris and Environmental Protection Agency Administrator Michael Regan spoke at an event on July 14, 2023, announcing the plan, which creates two complementary competitions providing funding for community-based climate projects across the country.
The competitions are part of the $27 billion Greenhouse Gas Reduction Fund. Established last year under the IRA, the fund aims to “combat the climate crisis by catalyzing public and private capital for projects that slash harmful climate pollution” (White House). Both newly announced competitions seek to achieve this goal by activating a broad financing network to support clean energy initiatives.
The first of the two programs, the $14 billion National Clean Investment Fund (NCIF), will award grants for two to three national financial institutions. With this funding, institutions will provide affordable financing for clean energy projects within the private sector.
The $6 billion Clean Communities Investment Accelerator (CCIA) will issue grants for up to seven nonprofit groups committed to curbing climate change. These organizations will use CCIA grants to offer technological and financial support for community lenders working to finance clean energy projects.
With the combined $20 billion in funding, the Biden administration hopes to boost projects such as constructing electric vehicle charging stations, providing communities with backup battery power, and improving energy efficiency in small businesses and homes.
Both competitions focus on serving low-income and disadvantaged areas, making them part of the White House’s commitment to promoting environmental justice. As part of the Biden administration’s Justice40 Initiative, at least 40% of NCIF funds will flow toward underserved groups, including tribal, rural and traditional energy communities. These communities will receive the entirety of CCIA funds.
The deadline to submit applications for the NCIF or the CCIA is Oct. 12, 2023. The EPA anticipates winners will be selected by March 2024 and project funding will begin as early as July 2024.
The authors thank McGuireWoods case assistant Cameron Ruh for assistance preparing this legal alert. She is not licensed to practice law.