The Importance of Green Finance for the District
Eli Hopson and Brandi Colander
Green banks are a new concept for many in our community and across the nation. However, states and municipalities around the country have been creating these institutions for over a decade, beginning with the state of Connecticut’s green bank in 2011. Under the leadership of Mayor Bowser and the City Council, the District joined this movement in 2018 with the passage of the Green Finance Authority Establishment Act, and with the subsequent onset of full operations of DC Green Bank in 2020. As we embark on our second full year of operations, we think it is important that we continue to take the time to ensure that everyone in our community knows what green banks are, what impacts they can have for residents and communities, what DC Green Bank has done to date, and what we see for the future.
What Exactly is a Green Bank?
This is one of the most common questions our team receives. Green banks are financial institutions that make loans and investments similar to private banks, but they do so based on different goals and expected impacts. Although green banks do not take deposits or have consumer lines of credit, they create prosperity far beyond the boundaries of any one investment. Green banks are mission-driven financial institutions that invest public dollars to deploy clean energy systems, increase energy efficiency, save money for businesses and residents, create jobs, and accelerate progress toward meeting climate, energy, economic, resilience, and public health goals.
In line with this understanding about green banks, our mission at DC Green Bank is to provide access to capital, growing the clean economy to develop a more equitable, resilient, and sustainable DC. As a green bank, the way we pursue this mission is to view every loan through the lens of our core values – Sustainability, Inclusive Prosperity, and Clean Economy.
Sustainability: This means that we align the impacts of our loans with a world in which we all live within in a healthy environment.
Inclusive Prosperity: We strive to ensure that our investments reach every part of the District, and specifically target financial impact and job creation in portions of the city that have been underserved in the past.
Clean Economy: We know that a green city means a prosperous city, and that’s why our investments are designed to lead to local job creation and to contribute to a foundation where DC becomes home to the jobs of the future.
In line with our values, we are working hard to not only deploy our resources to transform the city into a cleaner, greener, and more equitable home for our residents, but we are also working to show the way for private financial institutions so that over time all banking in the District is green banking.
What Specific Impacts Can Green Banks Have for Residents and Communities?
Green banks are unique because they are inherently local institutions and, therefore, are ideally suited to put both residents’ and communities’ sustainability and inclusive prosperity needs at the forefront. Here are just a few of the benefits of going green:
- Green means that residents, communities, and businesses save money.
- Green means that we are able to invest in good, well-paying jobs right here in our community.
- Green means that we have access to clean, renewable energy that improves the health and wellbeing of our residents and alleviates large fluctuations in energy prices.
- Green means that the air quality for our families improves every day.
- Green means that we can move rapidly towards improving water quality for our residents and in our waterways.
- Green means that we have an opportunity to reverse decades of underinvestment in communities that have all too often been left behind.
- Green means that we can prepare for the impacts of climate change by addressing urban heat impacts, flooding, and carbon emissions.
Green is not just a buzzword; it means that, together, we can build a cleaner, safer, and more prosperous future for all DC.
What has DC Green Bank Accomplished to Date?
Now that we have discussed what green banks are and what concrete impacts they can deliver, we want to give you an overview of what DC Green Bank has accomplished so far right here at home. Although we are a young institution, we have hit the ground running. Since our launch last year, we have established robust policies and procedures and brought on board a strong team with critical expertise, growing from just 1 to now 12 full-time employees. We have launched exciting financial products to meet the rising investment needs for solar energy systems, green and efficient buildings, stormwater infrastructure, and transportation electrification. To date, we have made approximately $3 million dollars available for community investments, which is slated to unlock over $15 million of additional investments from partners. Hundreds of low-to-moderate income District families have seen their energy bills cut in half through the expansion of solar energy deployment. We are also on track to finance projects that are expected to divert and capture over 250,000 gallons of stormwater runoff per storm event. Lastly, through our investments, our projects expect to generate a total of over 100 clean economy jobs.
If you’d like to read a little more about some of our investments to date, you can do so here:
- Stormwater Infrastructure Loan with Green Compass
- Pre-development Loan with Medici Road
- Solar Deployment with Flywheel Development
These are the types of impacts we have delivered already in our short time operating in the District, and the best is yet to come.
What Does the Future Look Like for DC Green Bank?
Since our city is a completely urban environment, it means that a significant portion of our greenhouse gas emissions come from our buildings – over 70%. That is why the District is in the process of instituting the first-in-the-nation Building Energy Performance Standards (BEPS), and why we are poised to take the lead in financing a transformation of the city’s built environment. The BEPS process will require that all buildings over a certain size appreciably increase their energy efficiency in the coming years by upgrading their buildings and systems – HVAC, lighting, water, insulation, building controls, and more. DC Green Bank will be building owners’ first stop as they look to identify capital to invest now to upgrade their buildings and save money over the long term.
In addition to investing in large buildings, we are in the final stages of cementing exciting new partnerships. In particular, we are looking forward to providing pathways for all residents, community organizations, and small businesses in the District to do their part to contribute to a cleaner future while also saving money. This means that whether you are looking to transition from gas to electric appliances, or upgrading the building structure or windows, or installing solar panels you will be able to come to us for the financing. We all have a role to play, and DC Green Bank should be your home for all things green finance.
We are excited about the future and to share with you everything our team has to offer in Year Two of operation and beyond.
Eli Hopson is the Chief Executive Officer of DC Green Bank.
Brandi Colander is the Chair of the Board of Directors of DC Green Bank.