Advocates urge expansion of state climate bank to leverage private capital as federal funding wobbles

Sherry Morgan of Elders Climate Action and other witnesses told the committee that private capital channeled through green or climate banks offers a scalable way to replace or stretch dwindling federal support.

Morgan described the Connecticut Green Bank's record and said an expanded Massachusetts Climate Bank could act as a hub using deposits, bond proceeds and other programmed funds to leverage private investment for community-level climate projects. She said proposals under discussion would permit a state-backed financial institution to accept a range of public and private deposits, issue bonds, and operate financial products that draw private capital to public-interest projects.

Catherine Antos of EEA confirmed the administration is talking with other states about different green-bank models and is in conversation with the Massachusetts Community Climate Bank to evaluate expansion options that would “stretch state investments.” Senators and witnesses discussed details to consider in legislation, such as eligible revenue sources, allowable financial products, governance, and how to connect a central hub to sector-specific “spokes” (for example, housing or municipal funds).

Advocates said a climate bank could be designed to catalyze projects in underserved communities and to provide interim financing where federal reimbursements have been paused. Witnesses recommended lawmakers consider legislative language that preserves state oversight while enabling private investment and public–private co-investment structures.