PREPARING FOR THE GREENHOUSE GAS REDUCTION FUND

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Frequently Asked Questions

In October 2023, OFN submitted a historic bid to finance a clean energy transition in underinvested communities through the Clean Communities Investment Accelerator (CCIA), part of the EPA’s $27 billion Greenhouse Gas Reduction Fund (GGRF). 

The EPA recently announced the selected awardees, and OFN was selected to receive a $2.29 billion CCIA grant. Here we answer our members’ most frequently asked questions about CCIA.

Program

CCIA is a $6 billion program for national nonprofit “hubs” to deliver financial resources and technical assistance to build the climate lending capacity of community lenders working in low-income and disadvantaged communities.  

More than 90% of the CCIA funding will pass through the nonprofit awardees (hubs) to community lenders as capitalization and technical assistance subaward funding (see more below).  

The awarded nonprofits will provide resources and services to the community lending industry and manage the program in coordination with the EPA over the six-year performance period.  

Helpful Terminology

OFN is a selected awardee of the CCIA program. Awardees may also be referred to as “grantees” or “pass-through entities.” Organizations that receive funding from a grantee or pass-through entity are considered “subawardees.”

The EPA announced funding decisions on April 4, 2024.  

CCIA and NCIF program implementation may begin in July 2024. The CCIA program will have a six-year performance period with continued monitoring by the EPA during that time. The NCIF performance period is seven years.  

OFN members and other mission-driven community lenders can begin preparing for the funding opportunity now (see below). 

Once the funds are obligated, they cannot be pulled back. With EPA contracts expected to be signed in the next three months and implementation starting in July, the 2024 elections will not impact the disbursement of GGRF funds.

The communities served by mission-driven community lenders are the very ones most impacted by the effects of climate change.  

In 2023, OFN issued a call to action that all CDFIs provide climate loans to mitigate the impact of climate change and help their communities become more resilient.  

OFN’s CCIA program is designed to build a pathway to climate lending for all mission-driven community lenders, no matter where you are on your climate lending journey. OFN offers capital and capacity-building resources (and will develop more over the course of the program) for mission lenders seeking to begin or expand climate lending programs.  

Eligibility And Funding

To receive CCIA funding from OFN, you must be an OFN member.

Join OFN.

Each pass-through entity, including OFN, will define its own subaward application process, timeline, and requirements and will announce subaward application instructions after the awards are announced by the EPA.  

OFN will inform members of the anticipated subaward application timeline as soon as is practical, but here is generally what you can expect: 

  • CCIA award announcement: March 2024  
  • Begin CCIA period of performance: July 2024 

Awardees will announce their strategies, how lenders can get involved, and their processes and timelines for distributing funding as soon as those plans are confirmed with the EPA and available for public distribution. 

OFN intends to open its first funding cycle in the second half of 2024.  

This is a six-year program, and there will be multiple funding rounds. 

Funding is available to OFN members (certified CDFIs and other mission-driven community lenders) in the form of capitalization funding and technical assistance funding. 

Capitalization funding. Capitalization funding must be used to provide financial assistance to CCIA-eligible projects (see below for eligible projects). Capitalization is in the form of a restricted, on-balance-sheet grant. 

Award maximum: $10 million in total capitalization funding from all CCIA grantees. A subawardee may receive total capitalization above the $10 million cap if the EPA has approved a grantee’s framework for those exceptions. 

The EPA defines financial assistance as follows (note that a grantee may restrict this definition as part of its program design):  

  • Debt, such as loans, partially forgivable loans, forgivable loans, zero-interest and below-market interest loans, loans paired with interest rate buydowns, secured and unsecured loans, lines of credit, subordinated debt, warehouse lending, loan purchasing programs, and other debt instruments.
  • Equity, such as equity project finance investments, private equity investments, and other equity instruments). 
  • Hybrids, such as mezzanine debt, preferred equity, and other hybrid instruments
  • Credit enhancements, such as loan guarantees, loan guarantee funds, loan loss reserves, and other credit enhancement instruments. 

Technical Assistance funding. Technical assistance subaward funding is available for capacity building to equip mission-driven community lenders to provide financial assistance to CCIA-eligible projects. Grantees will provide these subawards in the form of subgrants.  

Award maximum: $1 million in total technical assistance subawards from all CCIA grantees. A subawardee may receive total technical assistance subaward funding above the $1 million cap if the EPA has approved the grantee’s framework for those exceptions. 

Technical assistance activities include, but are not limited to: 

  • Procuring training, market analysis, and technical support  
  • Hiring staff 
  • Developing new financial products 
  • Supporting pre-development activities, such as site and building assessments (e.g., energy audits), financial and technological feasibility studies (e.g., solar resource studies), design and engineering support, and permitting support. 

Only subawardees who have been selected for capitalization funding may receive a technical assistance subaward. 

Use of Funds

Funding received through the GGRF programs may only be used on eligible projects. For CCIA, funding must support a project, activity, or technology that meets all the following requirements:

  • Falls within at least one of the following three priority project categories:
          • Distributed energy generation and storage
          • Net-zero emissions buildings
          • Zero-emissions transportation
  • Reduces or avoids greenhouse gas emissions (including carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride) consistent with the climate goals of the United States
  • Reduces or avoids emissions of other air pollutants
  • Delivers additional benefits to American communities within one or more of the following seven categories: :
          • Climate change 
          • Clean energy and energy efficiency 
          • Clean transportation 
          • Affordable and sustainable housing 
          • Training and workforce development 
          • Remediation and reduction of legacy pollution 
          • Development of critical clean water infrastructure
  • Serves a low-income and disadvantaged community, defined as 
          • Climate and Economic Justice Screening Tool (CEJST)-identified disadvantaged communities 
          • EJScreen-identified disadvantaged communities 
          • Geographically dispersed low-income households 
          • Properties providing affordable housing 
  • Would not otherwise have been financed
  • Mobilizes private capital
  • Uses only commercial technologies

Reporting

Recipients of funding, both grantees and subawardees, will require significant reporting and compliance with federal regulations.  

Reporting will be required quarterly and annually and will include specific technical information, including greenhouse gas reduction emissions and transaction-level details.  

Subawardees must comply with 2 CFR 200 and be subject to single audit requirements if more than $750,000 in federal funds are expended annually.

CCIA is a six-year program with multiple rounds of funding and continual monitoring by EPA during that time. At the end of the performance period, grantees and subawardees will undergo a close-out process with EPA, although the details of this process are not currently known.  

OFN Support

Yes. OFN will provide technical assistance to help OFN members and other mission-driven community lenders find a path to access CCIA program funding for distributed energy generation and storage, net-zero emissions buildings, and zero-emissions transportation. 

The suite of services will include nascent climate lender training and a climate help desk that will offer strategy-level and project-level assistance. The industry can access these resources before applying for direct funding. Members, industry practitioners, and partners can always access climate lending resources in our resource library and learn from other practitioners on CDFI Connect. 

If awarded funding, OFN will provide additional details and specifics on OFN’s CCIA program as soon as possible. In the meantime, OFN members and other mission lenders may prepare in several ways:

  • Sign up for an upcoming OFN climate lending training.
  • Join the Climate Mitigation and Adaptation Community on CDFI Connect.
  • Get familiar with eligible uses of CCIA funding (see above).
  • Get familiar with CCIA-eligible projects (see requirements above).
  • Ensure your organization’s processes are 2 CFR 200 compliant.
  • Understand single audit requirements.
  • Begin to build a pipeline of eligible projects.
  • Begin developing a strategy and plan to support your subaward application that includes the following:
            • A plan for the use of capitalization funding that aligns with the CCIA program objectives and OFN’s investment objectives (details to come)
            • A plan and budget for the use of technical assistance subaward funding received by the applicant to support the deployment of capitalization funding
            • Details on how your plan will deliver broader positive outcomes, such as:
              • Creation of high-quality jobs with a diverse, skilled workforce
              • Consumer protection across all entities that interact, transact, or contract with a consumer
              • Maintaining the affordability of existing housing stock, minimizing displacement, and preventing rapid cost increases.

Carbon emissions, clean energy, and climate change may not resonate with your communities, but there are related messages that may convince community members to act. For example:

  • Reduced costs: Energy efficiency upgrades reduce utility costs for homeowners and businesses, as do solar and battery installations.
  • Resiliency against extreme weather impacts: Upgrades have the added benefits of providing resiliency against weather-related power outages and increasing home values.
  • Healthier communities: Choosing clean energy solutions, like electric vehicles and stoves, reduces air pollution in our homes, neighborhoods, and near our roadways.
  • Good jobs: Clean and renewable energy projects bring many good quality jobs to your community, which may attract additional investment.

OFN will provide marketing and messaging materials to help OFN members and other mission lenders reach diverse audiences with climate lending products.

These FAQs will be updated as often as is practical with new questions and answers and the latest information. If you have a time-sensitive question that is not answered here, or would like to suggest an additional question, please send an email to ggrf@ofn.org.

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