Washington, D.C., could become the first city in the country to establish a green bank, a tool used to help invest public funds in clean energy projects.
Mayor Muriel Bowser will introduce legislation to create a green bank in the next few weeks, according to a statement from the mayor’s office.
Green banks offer traditional banking services like loans, leases and credit enhancements intended to improve funding for clean energy projects, the statement said. Unlike traditional banks, their financial capital comes from public funds.
D.C.’s green bank would be intended to help fund projects like Nixon Peabody’s community solar project, a collection of solar panels on three commercial rooftops in downtown D.C. that provides energy to low-income residents in Southeast and Southwest.
“[A green bank] should help tremendously,” said Jeff Lesk, managing partner of Nixon Peabody’s D.C. office. “Because the debt that we got was from a great, mission-oriented lender, but they can only have so much capacity. They can only make so many loans for this type of project.”
The funding provided by green banks isn’t intended to fully fund projects, but to encourage private funding by reducing risk and providing a secure government partnership, the statement said.
“The D.C. green bank will pair private capital with public investment to more efficiently achieve our ambitious greenhouse gas emissions reduction targets and to further reduce our reliance on fossil fuels,” said Department of Energy and Environment Director Tommy Wells in the statement.
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Herb Stevens, chief innovation officer at Nixon Peabody, said he sees companies are willing to get involved in environmental projects when governments provide financial help through a green bank.
“The whole idea of the green bank is to attract new private capital that wouldn’t have come in if the district hadn’t led the way,” Stevens said.
A green bank would create jobs and be a step toward reaching sustainability goals set in Climate Ready D.C., the city’s climate change readiness plan, the mayor said in the statement.
Although D.C. would be the first city with a green bank, it wouldn’t be able to boast the first green bank in the region overall. Montgomery County Council voted to establish a county green bank in June 2015, which is scheduled to be funded this month.