Green banks are starting to draw attention in the U.S., particularly since the federal government announced its first grant competitions under a national green bank program to bring clean technology and more affordable energy to low-income communities.

. . .

What is a green bank?

Despite the name, green banks aren’t traditional banks. They function more like investment funds with a mission to promote sustainability.

Green banks are public, quasi-public or nonprofit entities that use public funds to encourage private investment in low-carbon, climate-resilient infrastructure.

By using innovative financing strategies, green banks can lower the risks for private investors to support projects, which reduces the amount of public money needed to reach government goals like expanding renewable energy or, in this case, affordable housing.

. . .