What’s a Green Bank or a Climate Bank?
Tackling climate change and transitioning to clean energy isn’t just a technological or political challenge—it’s an economic one. The energy transition and climate adaptation strategies will require trillions of dollars in investment. “Climate Banks”, also known as “Green Banks,” are designed to provide financing to aid the transition to clean energy and the response to climate change. Beyond getting energy projects built, these investments reduce carbon emissions, generate jobs, boost economic growth, and build more resilient communities.
The Illinois Climate Bank
In 2021, the Climate and Equitable Jobs Act (CEJA) designated the Illinois Finance Authority (IFA) as the Illinois Climate Bank. The law directed the new Climate Bank “to aid in all respects with providing financial assistance, programs, and products to finance and otherwise develop and implement equitable clean energy opportunities in the State to mitigate or adapt to the negative consequences of climate change…” The IFA’s historic focus had been on non-profit health and water infrastructure financing.
Creating a Climate Bank in Illinois could not have come at a better time to leverage historic funding from the federal Bipartisan Infrastructure Law and Inflation Reduction Act. Over the past two years, the IL Climate Bank has secured hundreds of millions in federal funding that will flow to climate and energy projects in Illinois homes, businesses, and communities. Let’s take a look at the funding and financing opportunities available and in the works with the Illinois Climate Bank. Questions about many of the opportunities below can be directed to federalfunding@il-fa.com.
Not sure what IL Climate Bank Opportunity is right for your community or non-profit, or are you curious about other energy and environment funding opportunities? Request technical assistance from the Great Lakes Thriving Community Technical Assistance Center to navigate these opportunities and more.
Grant Opportunities
Grid Resilience Grants ($40M) – Program launched May 2024, annual grant program
In May 2024, the IL Climate Bank issued the first Notice of Funding Opportunity (NOFO) for the new Grid Resilience Grants aimed at improving the resilience of Illinois’ electric grids. The grant program is funded at $8 million/year and is expected to continue through 2028. Funds can be used for a variety of investments, including but not limited to microgrids and battery storage, weatherization, utility pole management, and automation. Small utilities, including rural electric cooperatives and municipal utilities, are eligible for this grant. For a full list of eligible entities, please see page 10 of the 2024 NOFO.
Solar for All ($156M) – Programs will launch April – December 2025
In April 2024, the IL Climate Bank was awarded a $156 M grant from the Inflation Reduction Act’s Greenhouse Gas Reduction Fund Solar for All program. Illinois has an existing state Solar for All programs administered by the Illinois Power Agency with funding from CEJA. The IL Climate Bank will use the funding to create “IL Solar for All Expansion Programs.” The Expansion Programs are still under development, but are expected to include both grant and financing opportunities to bring solar to low income residents, the public and non-profit sectors, and disadvantaged businesses.
In December 2024 the IL Climate Bank launched Working Groups to help inform and design the expansion programs. You can watch the Working Group Launch Webinar here, or sign-up for the Working Groups here.
Small Utility Clean Energy Planning Support Program ($2.6M) – Program will launch Quarter One 2026
The “Small Utility Clean Energy Planning Support” program will provide technical assistance and grants to municipal utilities and rural electric cooperatives in Illinois to assess needs and identify ways to replace fossil fuels with renewable energy. The funding for this new program is made possible from the state’s successful Climate Pollution Reduction Grant (CPRG) award. About $2.6 million will be spent on the new program over a five year period. We have prepared a brief fact sheet about this program based on information available in the state’s CPRG application.
Charging and Fueling Infrastructure Program ($15M) – One time subgrants, no additional opportunity
In January 2024, the state shared news that the IL Climate Bank had won $14.9M in federal funding from the US Department of Transportation’s Charging and Fueling Infrastructure (CFI) Program for electric vehicle charging infrastructure. The Climate Bank worked with over 40 partners, including park districts, counties, nonprofits, higher education entities, to identify 273 project sites that will receive electric vehicle charging stations (845 Level 2 EV Charging Stations and 36 DC Fast Charge stations).
Finance Opportunities
Energy Efficiency Revolving Loan Fund ($14M) – Program will launch Summer 2025
The IL Climate Bank is launching an Energy Efficiency Revolving Loan Fund (EE RLF) to offer low-interest loans for climate and energy projects statewide. The fund will focus on helping nonprofits, public entities, and underserved communities finance building electrification, energy audits, energy efficiency, energy storage, and distributed generation projects. These tax exempt entities are now eligible for a “direct pay” tax credit for clean energy projects, up to 50% of the project cost. There is often a delay in receiving these payments and this new EE RLF Bridge Loan will be designed to require no monthly payments until receipt of direct pay tax credits from the U.S. Treasury. Solar businesses will also have access to the loan fund. While the program is not open yet, the IL Climate Bank has a great website with a description and FAQ about the upcoming opportunity: www.il-fa.com/programs/ee-rlf.
State Small Business Credit Initiative’s Loan Participation Program ($20M) – Program Available Now
The State Small Business Credit Initiative (SSBCI) funds the IL Climate Bank’s Loan Participation Program, which works with banks and other financial institutions to provide low-interest loans to small businesses for energy and environment projects. Loans between $25K and $2M (25-50% of project costs) are available with low interest rates. Eligible projects include clean air and water projects, renewable energy projects, electric vehicle charging stations, energy conservation, broadband expansion, and more. The contact for the SSBCI is Maria Colangelo, mcolangelo@il-fa.com.
C-PACE Program – Program Available Now
The Commercial Property Assessed Clean Energy (“Commercial PACE” or “C-PACE”) is a financing structure for commercial properties that allows borrowed capital for clean energy projects to be repaid over time through a voluntary tax assessment. A C-PACE program with the IFA, is available to all counties and municipalities in Illinois. Owners and developers of commercial properties can use C-PACE financing to finance or refinance eligible clean energy improvements (e.g. energy efficiency, renewable energy, electric vehicle charging stations). Four Illinois Counties and 15 municipalities are currently participating in the IFA’s C-PACE Program. The Illinois Finance Authority contact for the C-PACE program is Brad Fletcher, bfletcher@il-fa.com.
National Clean Investment Fund ($100+M)
In April 2024, the USEPA announced grant awards from the Inflation Reduction Act’s Greenhouse Gas Reduction Fund. The IL Climate Bank was awarded funds through their successful application in partnership with and led by the Coalition for Green Capital (CGC). The IL Climate Bank plans to utilize the money to further equitable energy and climate financing in Illinois. Funding will be available for the following types of projects: Electric Vehicle Fleets & Associated Infrastructure, tax credit bridge loans to local governments and non profits, Carbon-Free Schools, and Building Electrification.
IL Climate Bank Funds can be “Stacked” with other Clean Energy Incentives
Opportunities with the IL Climate Bank can be leveraged alongside other state and federal incentives and funding for clean energy. For example, the state provides financial incentives for solar energy projects known as Renewable Energy Credits (RECs), covering 25-35% of project costs. Federal tax credits for clean energy are now available as Direct or Elective Pay. This means that tax-exempt entities, like nonprofits and municipalities, can now get 30-50% federal tax credits for clean energy projects. The state’s utilities, Ameren and ComEd, have programs for energy efficiency projects. Countless other state and federal grant programs are available to fund clean energy, electric vehicle infrastructure, and climate resiliency, particularly in disadvantaged and rural communities.
Green Bank for Rural America
Illinois’ rural and energy communities have access to another “Green Bank”. The Green Bank for Rural America will offer funding opportunities for community lenders to help rural areas gain the most benefit from the new energy economy. In particular, this Green Bank will disburse Capitalization Funding and Technical Assistance Awards to over 75 participating Community Development Financial Institution (CDFI) and other public and non-profit loan funds, bringing new investment for energy projects. In addition to working in Appalachia, this Green Bank will work in rural communities across the country, with a priority for energy communities.
