Green Banks
Green banks are financial institutions—public, quasi-public, or nonprofit—created to accelerate investment in clean energy and related infrastructure. Unlike other financial institutions, they are designed around a public-purpose mission to expand access to affordable, reliable clean energy by financing projects from infrastructure scale to local technology deployment.
Although the term has no formal legal or regulatory definition, two features consistently distinguish green banks from other clean energy programs such as grant funds, tax credit programs, or public agencies that support clean energy but do not operate as standalone financial institutions:
Environmental focus: their mission and portfolio are dedicated to projects with environmental benefits such as renewable energy, efficiency upgrades, resilience, or clean water, and none of their investments increase greenhouse gas emissions.
Financial intermediation: they operate as distinct financial institutions (if not “banks” per se) that structure loans and investment products which recycle capital over time, rather than providing one-off grants or subsidies.
The first U.S. green banks were founded between 2007 and 2009. Today, there are over 40 at the state and local level, alongside a newly established national green bank. Collectively, they invested more than $10.6 billion in 2023 alone, bringing total public-private clean energy investment since their founding to more than $25 billion.
Green banks fill market gaps by:
De-risking projects through tools like loan guarantees and credit enhancements;
Financing innovation by structuring first-in-kind transactions and standardizing products;
Expanding access for households and communities often excluded from traditional financing; and
Aggregating projects to attract institutional investors and reduce costs.
The Coalition for Green Capital (CGC), founded in 2009, has been central to this growth—helping launch many state and local green banks and, more recently, developing itself into a national green bank. While green bank models vary—from state-chartered institutions like the Connecticut Green Bank, to independent nonprofits like Michigan Saves—their collective impact is growing, bridging public policy goals with private capital markets to deliver environmental and economic benefits.
Read more in my 2025 white paper The Evolving Landscape of US Green Banks, published by the Climate Solutions Lab at Brown University.
