Entrepreneurs in Appalachia have ideas for renewable energy projects, but finding funding in rural and low-income areas can be challenging. A new initiative, the Green Bank for Rural America, could help channel funds to small, rural, nonprofit lenders to support projects like community solar arrays, apprenticeships in renewable energy fields and electrified public transit, just to name a few.

The green banking movement began as a way to finance small green energy projects. Banks loan money to businesses all the time, but loan processes can be difficult for business owners in low-income or rural communities. Community development financial institutions, or CDFIs, play a crucial role in supporting projects that otherwise might not get financed.

“CDFIs kind of serve as the on ramp for communities and banks on the highway,” Donna Gambrell, president of Appalachian Community Capital (ACC), said. The firm works to leverage resources toward low-income Appalachian communities through CDFIs. These small, community-based lenders are often better positioned to help businesses and people in under-invested areas.

New federal funding will help ACC provide more assistance to their small lender network. The steering committee for the Green Bank includes multiple CDFIs from across the Appalachian Region, including CommunityWorks Carolina, Grow America, Coalfield Development, Inc. and others.

The Environmental Protection Agency awarded ACC $500 million in seed funding to start a Green Bank for Rural America. The bank will prioritize the Appalachian region’s 582 counties, while also serving other communities across rural America, particularly low-income communities, communities of color, and communities in transition from fossil fuels. Gambrell said the bank will leverage private capital to create thousands of jobs in renewable energy.?

“We wanted to make sure that these were high impact projects, green projects, renewable energy projects that were in low wealth rural communities,” Gambrell said. “The projects themselves would help create jobs that stay in hard hit communities.”

The funds are part of the EPA’S $27 billion Greenhouse Gas Reduction Fund, which was created explicitly to support nonprofit lenders with a history of deep community relationships and investment in local projects. They are also intended to leverage further private investment, which ACC predicts could amount to $1.6 billion for the Appalachian region in total.?

The Green Bank is intended to raise the capacity for community lenders and allow for increased investment in all phases of energy transition and climate resilience, including workforce training, renewable energy storage, electric transit, home energy efficiency and disaster relief.

The money will support work that’s been going on in communities for a long time, Robin Gabbard, the president of Eastern Kentucky’s CDFI, the Mountain Association, said.??

In Eastern Kentucky, the Mountain Association supports rural community centers, groceries, small businesses, charities and homeowners by financing solar panels and energy retrofits that have saved them thousands.?

Gwen Christon runs an IGA grocery store in Isom, a town in Eastern Kentucky that already struggles with exorbitantly high power bills and a lack of grocery options. Climate change is worsening both problems. When her store was devastated by a flood, Christon had to start over, turning her town into a food desert as she searched for ways to reopen, Gabbard said. The Mountain Association helped Christon get funds for improved coolers, heating and air.?

“They’re reaping the benefits of reduced energy costs, so that they can reinvest back into their businesses and continue to grow their workforce, provide lower cost groceries,” Gabbard said.

Western North Carolina is served by five members of Appalachian Community Capital: Carolina Small Business Fund, Carolina Community Impact, Mountain BizWorks, Institute Capital and Piedmont Business Capital.The institutions are preparing to be ready to go when the new funding becomes available in 2025.

This story is republished from Blue Ridge Public Radio and is made possible ?through a partnership between BPR and Grist, a nonprofit environmental media organization.