New federal funding will enable small nonprofit lenders to finance more renewable energy projects in Eastern Kentucky and the rest of Appalachia. (Getty Images)
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.