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- By Brian Edwards, Chez Oxendine
- Energy | Environment
A nonprofit investment fund created to finance clean energy projects across America, including Indian Country, filed a federal lawsuit yesterday against Citibank, the U.S. Environmental Protection Agency (EPA) and EPA Administrator Lee Zeldin, seeking to regain access to federal funds that have been frozen for three weeks.
Bethesda, Md.-based Climate United Fund, which was awarded $6.97 billion through the EPA’s National Clean Investment Fund (NCIF) program last year, alleges it has been unable to draw funds from the EPA-controlled accounts at Citibank since Feb. 18, despite numerous formal inquiries.
Per prior Tribal Business News reporting, Climate United has committed to investing at least $620 million — about 10% of its NCIF award — in Native communities. Several projects in Native communities are now stalled, and nearly two dozen tribes and Native-serving organizations that were approved for early stage development grants cannot access promised funds for their clean energy initiatives.
"This isn't about politics; it's about economics," Beth Bafford, CEO of Climate United, said in a statement shared with Tribal Business News. "This program was designed to save money for hard-working Americans who are struggling to pay for groceries and keep the lights on. We're going to court for the communities we serve — not because we want to, but because we have to."
The 35-page lawsuit, filed in the U.S. District Court for the District of Columbia, claims that the EPA took action to prevent Citibank from disbursing funds, harming Climate United, its borrowers, and the communities it serves. The complaint argues that Citibank has breached its contractual obligations under an Account Control Agreement by failing to disburse the funds at Climate United’s request.
The legal action comes after EPA Administrator Zeldin announced plans on Feb. 12 to investigate and attempt to claw back $20 billion in clean energy grants, including $1.5 billion earmarked for tribal communities. On March 2, EPA Deputy Administrator W.C. McIntosh formally referred the matter to the EPA’s Office of Inspector General, while Zeldin publicly stated that the “DOJ/FBI is investigating” the matter, according to the lawsuit.
According to the Climated United lawsuit, Zeldin has made several public statements expressing hostility to the program, stating on national television in late February that “the entire scheme, in my opinion, is criminal” and publicly declaring on March 4 that “the money is now FROZEN.”
The Greenhouse Gas Reduction Fund (GGRF), created under the Inflation Reduction Act of 2022, established three programs totaling $27 billion to catalyze clean energy investments nationwide. The fund includes two “green bank” programs — the $14 billion NCIF and the $6 billion Clean Communities Investment Accelerator (CCIA) — that focus on supporting local clean financing institutions. Both programs require at least 70% of funds to be invested in low-income and disadvantaged communities.
Climated United is one of three organizations selected to receive NCIF funding, while five other nonprofits received the CCIA funding. None have been able to access their funding for three weeks, according to media reports.
A third GGRF program, the $7 billion Solar for All initiative, also had its funding frozen by the EPA until earlier this week, per Tribal Business News reporting.
The lawsuit details significant impacts on Native communities from the freeze of Climate United funds. According to the complaint, Climate United has already committed $63 million in pre-construction financing for solar power plants in partnership with tribal governments and communities, with initial projects planned in Eastern Oregon and Idaho that would bring affordable energy access to rural and Indigenous communities.
Additionally, the nonprofit launched the Climate United NEXT program, which includes a pre-development grant program providing up to $30 million in technical assistance for community-led projects. After reviewing 104 applications in its first round, which specifically focused on tribal communities, Climate United approved 22 awards to tribes and Native-serving organizations across 18 states and anticipates issuing $6.35 million in initial awards.
“Those communities are excited to get the ball rolling, but there's no money to get those projects moving,” Climate United Chief Partnership and Strategy Officer Phil Aroneanu told Tribal Business News in an interview Sunday. “That's just one instance of people being unable to access the dollars they've been promised. Some of them have already hired contractors to do work and now they can't pay those contractors. It's had a pretty significant impact — we can't pay our operational costs.”
Aroneanu said Climate United had reached out to the EPA multiple times in the days after the funding freeze, hoping to clarify why the money was no longer available. A meeting was finally scheduled between the EPA, Climate United, and Citibank, but was abruptly canceled when Climate United revealed they planned to have their lawyers in attendance. The agency hasn’t responded to Climate United at all since the meeting was dropped, Aroneau said.
“It's confusing why the EPA just hasn't responded or told us what's up,” he said. The agency hasn’t produced any evidence of abuse or that Climate United hasn’t followed its work plan either, he said. “We'd like to have a conversation about how we're leveraging private capital. We were hired to do a job and we just want to do that job.”
A spokesperson for Citibank said the company was reviewing the lawsuit.
“As we've said previously, Citi has been working with the federal government in its efforts to address government officials' concerns regarding this federal grant program,” the spokesperson wrote in an email. “Our role as financial agent does not involve any discretion over which organizations receive grant funds. Citi will of course comply with any judicial decision.”
Tribal Business News reached out to the EPA early this afternoon for comment, but had not heard back by the time this story was published.