A new law makes “environmental infrastructure”, or natural capital ranging from parks to farms to forests, part of the domain of the Connecticut Green Bank.
Now the Green Bank is watching for an executive who shares the vision and philosophy of its founders, who will incorporate this work into a model that has overwhelmingly evolved in clean energy finance.
Bank senior team members spoke to CFN as part of his search for the ideal leader.
States across the country are changing laws to clarify and speed up funding for natural climate solutions. In 2021, the Connecticut legislature passed House Bill 6441 and the expansion of its state-chartered Green Bank to finance environmental infrastructure. Now Green Bank CEO Bryan Garcia and his team are looking for a senior member to crystallize and support the strategy. Garcia says it would be the first time the green bank has absorbed natural climate solutions, or what he calls environmental infrastructure, into his model.
Other green banks have worked in this territory, and the Connecticut legislature entered it by defining environmental infrastructure quite broadly. House Bill 6441 covers land conservation, climate adaptation and resilience, agriculture, parks, recreation, and ecosystem services. All of these uses could benefit from interim funding for project implementation, which could be capitalized through commissions or pay-for-success bonuses or revolving loans. The legislature dropped a different question about Garcia’s team. How do professionals value natural capital and attract more financial resources, and how do they calculate and model the benefits to the people of Connecticut? Garcia and his team have plenty of ideas, but expect most of the operational decisions to be made once a Director of Environmental Infrastructure joins the bank.
CFN spelled out some of the possibilities when we spoke in August and September with Garcia, Green Bank VP of Operations Eric Shrago, and Tee Thomas of Quantified Ventures. All emphasized that the new portfolio grows from Green Bank’s initial charter to provide accessible, affordable and targeted financing for small or overlooked borrowers. For Thomas, who is helping the Bank define and recruit for the new job, the last few years point to this new portfolio in a new context for climate finance.
“The demonstrated success of the Connecticut Green Bank created one of the key reasons we have the additional funding from the Inflation Reduction Act for green banks,” Thomas said, referring to a $20 billion provision for a national climate bank. within the $370 billion climate-charged law. passed by Congress this summer. “The Bank’s mission was to confront climate change by taking financing to do more with very limited public resources and mobilizing private investment. For every dollar they put in, they can leverage $7.50.”
How do we get away from this idea that we’re going to get grants and free money to change the world?
That model has been tested with tools like voucher retailing and programs targeting solar + storage schemes and other fast-growing segments of the clean energy value chain. Applying it to parks, land, and farms will involve some translation. Thomas says, “How do we get away from this idea that we’re going to get grants and free money to change the world?”
Garcia, who previously directed the Yale Center for Business and Environment and still advises it, says he is learning about the concentric circles of benefits provided by parks, regenerative agriculture systems and nature as a whole. He points out that parks create natural barriers to weather disasters, improve the mental health and well-being of people in urban communities, and safeguard biodiversity even while avoiding or reducing greenhouse gas emissions. He now wonders if health and insurance players would do well to invest in the park’s infrastructure, perhaps through a bond from the Connecticut Green Bank.
That education seems in tune with the way Shrago describes the bill that piqued Garcia’s curiosity.
“This idea has circulated before, but some of the impacts Connecticut has felt from the storm encouraged the governor’s office and the legislature to broaden its scope,” Shrago said in our interview. “Tropical Storm Isaias hit the coast in 2021, leaving many without power for a week or more. It brought home the impacts of climate change.”
On this count, since the state created the Green Bank to address climate change, expanding beyond wires and batteries into land and water seemed logical, but daunting and required new insights.
From a policy perspective, Thomas says, the challenge is figuring out how Green Bank’s financial authority and bond-issuing ability can have the greatest impact across a wide range of environmental infrastructure projects. “The Bank met with 50 or 60 stakeholder groups, having a very broad mandate to look at climate and resilience. You can consider everything and its brother: parks and recreation, agriculture and food waste and food safety, waste and recycling.
As they went along, Shrago says, they learned that these domains need interim financing, much like solar and wind projects needed bridging loans in the 2000s. “We’re exploring a collateral concept,” he says by way of example, “to improve access to capital at favorable interest rates. Compared to federal funds like state revolving funds, the Green Bank is an easier vehicle to be able to offer cheap capital.”
In that context, says Shrago, “we’re looking at what’s happening in ecosystem service markets and carbon offsets and how to translate that into playgrounds, forests and farms.” Garcia, in a previous interview, linked the Bank’s mission to resilience and air quality for urban communities and farmers in the northwestern part of the state.
Quantified Ventures, specialists in project development and financing with a special focus on health and ecology, has helped the Bank prepare courses for its environmental infrastructure leader to explore. Says Thomas, “Really, the opportunity right now is that a lot of work has been put into the possibilities of the universe; we need to turn this into tangible projects and the concept of investing in a park is a bit off for some.” .”
The Bank’s search for a leader in environmental infrastructure may be drawing to a close, but its exploration is just beginning. “What will we do? That’s the $64 million question,” Shrago says, as he and Thomas cite possibilities from home loans for rain gardens to collaboration with the state’s only stormwater utility. The next step is to start identifying projects and needs, prioritizing and working on ideas in a more applied way and with a greater degree of detail.” That means hiring a leader.
Along the way, the team says, new programs will need to harmonize with commitments to invest profits to repair old failures born of racism. They will also have to keep up with new rain patterns, the dangers of heat, and the challenges of water and air. “What we’re seeing is intersectional,” promises Thomas. “We have heard loud and clear that we have to be better stewards of the land.”