How is Wells Fargo Financing the Energy Transition?

Wells Fargo deployed US$87bn in sustainable finance during 2024, a record year that brings the bank’s total to US$264bn since 2021 and putting the bank more than halfway to its US$500bn by 2030 target.

Data centres and renewable energy projects account for much of the recent activity, according to Jeffrey Schub, Head of Sustainability at Wells Fargo, with corporate clients using the bank to finance energy infrastructure, affordable housing and clean technology.

“Today’s business leaders across a broad range of sectors are navigating many sustainability-related challenges and opportunities,” says Jeffrey. “Federal policy, regulations and the tax code are changing. Energy, housing and resilience needs are growing while affordability constraints increase.”

New electricity-driven technologies like electric vehicles and data centres are poised to change the power grid. “These factors point to new capital needs that are larger in scale and rely on smart financial support,” he says.

Labelled sustainable finance products gain traction with corporate clients

Clients increased their use of labelled sustainable finance products during 2024, according to Wells Fargo. These instruments include bonds and loans that fund specific activities or tie pricing to sustainability performance metrics. The bank underwrote more bonds for development banks that fund environmental and social projects globally.

“Many corporate decision-makers see business value in investing in renewable energy, clean transportation, water management, affordable housing and economic development,” says Jeffrey. “At Wells Fargo, bankers support clients to help them unlock that business value by meeting their sustainability-related financing needs.”

Equipment finance volumes grew, driven by electrified equipment and vehicle purchases. Corporate clients are investing in fleet electrification across sectors.

Wells Fargo is deploying capital for affordable housing through Low-Income Housing Tax Credit investments and loans originated through government-sponsored enterprises. Housing affordability constraints have intensified across US markets.

Wells Fargo Renewable Energy & Environmental Finance deploys $20bn since 2006

Wells Fargo has leading capabilities in the power sector, helping developers and utilities source the capital they need to meet the nation’s growing energy demand. “Much of this demand is now coming from data centres,” says Jeffrey. “Across the electricity sector, renewable energy sources are becoming increasingly cost-effective and readily available.”

The Renewable Energy & Environmental Finance team remains a leader in tax equity financing, investing more than US$20bn in renewable energy projects across nearly 40 states since 2006. “These transactions are helping to deploy clean energy and storage technologies.”

The bank is also leading debt-based transactions for renewable developers. “An innovative deal enabled a leading renewable developer to directly access capital markets in order to fund the construction of six fully contracted wind, solar and battery storage projects without relying on intermediary financing structures,” says Jeffrey.

Wells Fargo is helping utility clients that have historically relied on fossil fuels raise capital to pursue long-term investments in renewable power and battery storage as part of balanced and flexible capital plans to meet their own customer needs.

Data centre developers secure green financing as AI drives power demand

Wells Fargo’s commercial real estate business is leveraging its expertise in labelled sustainable transactions, which help direct capital to green building projects, renewable power sources and high-efficiency technologies. The bank led a US$3bn green loan facility for a leading data centre developer in 2024.

Data centre growth and the use of AI are driving energy needs. Developers are securing financing that links data centre construction to renewable energy projects and grid infrastructure investments.

“The power sector is entering a complex moment,” says Jeffrey. “As power demand and costs grow, clients and investors are relying on partners who understand how to successfully navigate changing policy and regulations.”

Wells Fargo works with utility clients that historically relied on fossil fuels to raise capital for long-term investments in renewable power and battery storage.

“Wells Fargo’s client focus and expertise across many aspects of sustainable finance shows the bank is well positioned to continue making progress toward its US$500bn sustainable finance goal while meeting market needs,” says Jeffrey.