The Minnesota Climate Innovation Finance Authority, known as the Green Bank, presented to the Senate Energy Committee about its role in financing projects aimed at reducing energy use and greenhouse gas emissions, enhancing renewable energy, and creating local clean energy jobs. Established by legislation from Senator Tou Xiong, the Green Bank, which operates on a loan basis rather than grants, has financed three projects in 2024 totaling $11 million. However, federal funding freezes have created uncertainty for private investors, potentially impacting job creation and energy prices in Minnesota. Senator Xiong urges Congress to reverse these cuts for the state’s green economy.
SAINT PAUL, Minn. – On Monday, the Senate Energy, Utilities, Environment, and Climate Committee received a presentation from the Minnesota Climate Innovation Finance Authority, also known as the Green Bank.
Legislation established in 2023 by Senator Tou Xiong (DFL-Maplewood) created the Minnesota Green Bank, aimed at financing projects that:
- Minimize energy consumption and/or lower greenhouse gas emissions
- Enhance renewable energy, energy storage, smart grid technology, microgrids, or electrification
- Decrease water usage, or safeguard, restore, and preserve surface waters
- Assist in meeting statewide greenhouse gas reduction objectives
- Ensure energy reliability
- Generate additional local clean energy employment opportunities
- Boost Minnesotans’ ownership of and involvement in the clean energy sector
- Alleviate the financial strain of energy expenses
The Green Bank functions as a lending authority—it does not offer grants. It provides loans that need to be repaid. These loans are typically structured as public-private partnerships with other capital sources. Generally, the Green Bank covers only 10-20% of the entire loan amount.
In 2024, three projects have been financed, amounting to $11 million in total capital. These projects include:
- Renewable Energy Partners: a solar and storage initiative for four schools in North Minneapolis
- The Heights: a mixed-use development spanning 1,200 acres, comprising 1,000 affordable housing units and 1,200 living-wage jobs on the East Side of Saint Paul. The Green Bank funded some of the geothermal piping
- Avenues for Youth: a Minneapolis homeless shelter catering to youth aged 16-24, offering up to 18 months of transitional care. The Green Bank financed sections of the geothermal renewable energy system and associated HVAC components
Senator Xiong issued the following statement:
“The inaugural year of Minnesota’s Green Bank has proven to be a significant success,” remarked Sen. Xiong. “Investments in green initiatives represent a burgeoning sector that Minnesota cannot afford to overlook. This marks merely the beginning of our state’s commitment to a sustainable future, climate resilience, and widespread economic prosperity. I am closely monitoring the Green Bank’s efforts to guarantee its ongoing success.”
Due to President Trump’s freeze on federal funding, several federal funding sources previously utilized by the Green Bank have been frozen. This situation has created uncertainty for private investors.
“Irregularly, the federal government has stalled funds that could create jobs in our emerging green economy,” stated Sen. Xiong. “For instance, freezing $25 million from the federal Coalition of Green Capital constrains the Green Bank’s ability to finance valuable projects across Minnesota and deters private investment. This unpredictability and turmoil are far from conducive for investment. If this persists, consumers will suffer from higher energy costs, Minnesotans will miss out on job opportunities, and our climate will continue to be negatively impacted as we struggle to advance our green energy sector. I urge our congressional delegation to act promptly to reverse these federal freezes and cuts.”
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