ABSTRACT

I examine how U.S. Green Banks (i.e., public or mission-driven lenders that recycle capital for climate related projects) shape the flow of green finance in the U.S. I assemble project-level microdata for 11 public and quasi-public Green Banks across nine states, and present first evidence that higher borrowing costs and coordination frictions lower the likelihood of private co-financing while raising the Green Bank’s dollar contribution per project. A simple Stackelberg model, with a welfare maximising Green Bank that co-finances with profit-maximising lenders, highlights leverage caps and coordination frictions as key constraints.

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