The Environmental Protection Agency recently announced the nonprofit organizations that will receive some of its $20 billion Greenhouse Gas Reduction Fund, including $6.97 billion to the Climate United Coalition.

Comprising Calvert Impact, Community Preservation Corporation and Self-Help, Climate United specializes in making green loans to fund specific decarbonization projects while also transforming existing traditional mortgages and project financing markets into greener transactions.

“Once the EPA put out the [NCIF] framework in April 2023, we then got to work in creating what we thought was the best structure and strategy to apply for the program,” said Beth Bafford, Climate United CEO and vice president at Calvert Impact.

That was when Calvert Impact made the decision to partner with Community Preservation Corporation and Self-Help to create the Climate United Coalition, a combination that enables the formation of a national cross sector and cross market segment strategy.

With the funds in hand, Climate United is able to take advantage of all three organizations’ experience working with private sector and investors, expanding their work with the billions now available.

“We now have this exciting source of federal funds that can be leveraged by private investors,” said Bafford, “but every investment that we make in this portfolio will have to meet the qualified project tests.”

Requirements to receive funds

The two qualified project criteria applicants must meet for a chance at the EPA funds are private capital in the prospective project and that the project is unlikely to receive finance from any other fund.

“There’s a real focus on unlocking transactions, deals, projects that otherwise could not get done without the support [of the the GHG Reduction Funds],” explained Bafford, emphasizing that the goal is to activate and accelerate private capital deployment, instead of displacing it.

Examples of projects that could fall into this category include decarbonization strategies for schools and school buses to heavy duty truck conversion projects to electric trucks to small commercial facility upgrades. In the past, Calvert Impact, founded in 1995 with the idea of funding directly into communities, has invested in similar projects, such as Eureka Recycling in Minneapolis and Sunwealth in Boston.

“In order to access and to invest in things that are more expensive upfront, that create those long term benefits, you need access to credit,” said Bafford. “And there are a lot of project types, community types and counterparties who lack access to affordable credit to get these things done.”

To stand out in a project application to Climate United, Bafford recommended optimizing all three program objectives of NCIF: significant GHG emissions reduction; direct and tangible benefits to American families and communities; and the ability to catalyze market transformation.

“We’re really looking at opportunities that sit in the middle of that Venn diagram,” said Bafford, and that help “transform the broader private credit markets, so that with the initial disbursement of funds, private markets become more inclusive.”

Climate United should officially be under contract with the EPA by the summer, Bafford said, and start making initial investments by the end of the year.

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