Environmental Protection Agency Administrator Lee Zeldin’s efforts to cancel $20 billion in climate grants meant to fund clean energy projects in low-income communities have led to litigation and controversy.
The grants were issued through the Biden administration’s Greenhouse Gas Reduction Fund, which was established as part of the 2022 Inflation Reduction Act passed by Democrats and signed by former President Joe Biden and included hundreds of billions of dollars in subsidies for clean energy. The fund was given a total of $27 billion, with $7 billion for a solar program called Solar for All and $20 billion to be distributed to eight nonprofit organizations through two major initiatives: the National Clean Investment Fund and the Clean Communities Investment Accelerator.
During the Biden administration, the EPA picked three selectees for the $14 billion National Clean Investment Fund and five selectees for the $6 billion Clean Communities Investment Accelerator to help “create a national clean financing network for clean energy and climate solutions … .” The administration assigned Citibank to manage the $20 billion grants for the eight nonprofit organizations.
Zeldin said the previous administration improperly distributed the funds and routed them through Citibank and a number of outside organizations in order to avoid oversight.
Zeldin has cited a video filmed last year in which a former EPA employee tells an undercover member of the conservative group Project Veritas that the Biden administration was trying to distribute the promised funds as quickly as possible before Inauguration Day.
“It truly feels like we’re on the Titanic, and we’re throwing like gold bars off the edge,” the former employee says in the video.
The EPA has since withheld the grant money from the organizations. Some intended recipients, though, have sued the EPA and Citibank to stop them from withholding the funds. As of now, the Solar for All program has remained untouched.
Here’s what to know about the eight awarded organizations:
National Clean Investment Fund
Under the $14 billion National Clean Investment Fund, the Biden administration awarded three selectees to help establish national clean financing institutions to provide financing for clean technology projects nationwide.
Climate United Fund
The Greenhouse Gas Reduction Fund awarded Climate United Fund $6.97 billion. The group planned to focus on investing in energy-efficient buildings, electrification upgrades, and solar installation projects.
The nonprofit organization coalition’s partners include the Calvert Impact, the Community Preservation Corporation, and the Self-Help Ventures Fund. The group is supposed to invest 60% of the funds in low-income communities, 20% in rural communities, and 10% in tribal communities.
Coalition for Green Capital
The Coalition for Green Capital is another nonprofit organization that received grant money. Its coalition members include nearly 18 financial institutions from across the country, including the California Infrastructure Bank, City First Enterprises, Colorado Clean Energy Fund, Connecticut Green Bank, Community Development Venture Capital Alliance, and the DC Green Finance Authority.
The coalition was awarded $5 billion in funding and said it would invest in green projects. It also said it would support green lenders nationwide and prioritize investments in energy generation and storage, net-zero emissions buildings, and zero-emission technologies.
Power Forward Communities
Power Forward Communities, a coalition formed by several housing, climate, and community investment groups, includes Enterprise Green Accelerator, the Rewiring America Community Investment Fund, LISC Green LLC, Habitat for Humanity, Habitat Capital LLC, and United Way Worldwide. The coalition was awarded $2 billion to lower utility bills in single-family and multi-family houses across the country.
Rewiring America has been a particular source of controversy because Stacey Abrams, a former Democratic nominee for Georgia governor and prominent liberal activist, became a senior counsel for the group in March 2023.
Zeldin has also noted that the organization received $2 billion in grant funding but only reported $100 in revenue in late 2023, suggesting that it was not very active before the federal government award.
All three of the nonprofit organizations sued the EPA for withholding its awarded grant money.
Clean Communities Investment Accelerator
The Clean Communities Investment Accelerator awarded five selectees to establish hubs to provide funding and technical assistance for groups working in low-income communities. Each of the selectees is a Community Development Financial Institute, which helps to finance small businesses, nonprofit organizations, commercial real estate, affordable housing, and more.
The first, Opportunity Finance Network, was awarded $2.29 billion. The coalition planned to provide capital and technical assistance to community lenders to invest and reinvest in projects that reduce emissions in low-income communities.
The nonprofit organization Inclusiv was awarded $1.87 billion, and Justice Climate Fund was awarded $940 million.
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Appalachian Community Capital also received $500 million to launch the Green Bank for Rural America, which is meant to leverage private capital to finance an estimated $1.6 billion into 2,000 new energy projects to create jobs and reduce emissions, according to the organization. The bank planned to prioritize 582 counties in Appalachia and other rural energy communities across the country.
Lastly, the Native CDFI Network is an organization that primarily serves native communities. It was awarded $400 million. The network said it aimed to provide capital and technical support to its network of 63 community lenders, most of which are Native CDFIs. The funding would help distributed energy generation, net-zero buildings, and zero-emissions transportation projects in native communities.