'Basel III' bank rules could pose unexpected threat to Biden's green energy plans

• Banks, renewable energy groups, and congressional Democrats are raising alarms about potential harm to clean energy and climate goals from a proposed banking regulation.
• The "Basel III endgame" framework would require banks to hold more capital for certain investments, including tax equity investments in renewable energy projects.
• The renewable energy sector has drawn $18 billion to $20 billion through tax equity investments in recent years and is projected to expand to $50 billion in the coming years.

WASHINGTON, D.C. - On a rooftop overlooking Gallaudet University in Washington, D.C., Julian Torres stands next to row after row of solar panels his company, Scale Microgrids, helped install as part of a larger system of renewable energy that has saved the college about $1 million per year in utility costs.

Torres, the company's chief investment officer, is among many people and institutions worried that such projects will be nearly impossible in the coming years due to a planned change in banking regulations.

The plan, part of an international agreement widely known as "Basel III endgame," is meant to prevent a global financial crisis by increasing the amount of capital that banks must hold for certain investments to cushion them against potential losses.

Torres said the proposed rule "potentially makes projects unfinanceable with the implied costs" and that he's already heard from bankers who have said they won't be able to continue funding renewable energy projects like the ones Scale Microgrids designed and installed at Gallaudet.

Major banks, renewable energy companies, environmental groups and more than 100 lawmakers have also expressed concerns about the proposed framework for the change being prepared by the