This morning, the Department announced that it is making $12.5 billion in loan guarantees available for Advanced Nuclear Energy Projects. My colleagues in the Loan Programs Office (LPO) and I are following up on this announcement by discussing the role loan guarantees can play in helping to build a strong U.S. nuclear power industry for the future before a gathering of industry professionals at the Nuclear Power International conference.

One area we intend to review is how LPO helped to finance the construction of the first new nuclear reactors in the U.S. in more than 30 years at Georgia’s Plant Vogtle. By committing $8.3 billion in loan guarantees for the project, LPO is helping to revitalize the U.S. nuclear industry, which has the potential to play a large role in meeting our future low-carbon energy goals.

We also will discuss the types of advanced nuclear energy technologies that have been identified in the solicitation as key areas of interest. While any technology that meets the eligibility requirements is welcome to apply, these four areas are of particular interest:

  1. Advanced Nuclear Reactors: This area focuses on nuclear energy projects with evolutionary, state-of-the-art design improvements in the areas of fuel technology, thermal efficiency, modularized construction, safety systems, and standardized design.
  2. Small Modular Reactors (SMRs): This area focuses on innovative technologies for nuclear energy projects that are nominally 300 MWe or smaller in size.
  3. Uprates and Upgrades at Existing Facilities: This area focuses on projects that use an innovative technology to improve an existing reactor by increasing efficiency, increasing capacity or making critical improvements that are integral to current or future facility operations.
  4. Front-End Nuclear: This area focuses on advanced nuclear facilities for the “front-end” of the nuclear fuel cycle. Of the $12.5 billion available under this solicitation, $2 billion is available exclusively for “front-end” projects. This could include uranium conversion or enrichment, as well as nuclear fuel fabrication.

Over the past 12 months, LPO has also issued an $8 billion Advanced Fossil Energy Projects Solicitation and a $4 billion Renewable Energy and Efficient Energy Projects Solicitation. Now, LPO can issue new loan guarantees for all of the clean energy technology areas for which it has loan authority under Title XVII.

With the amounts available for loan guarantees for innovative clean energy added to the $16 billion Advanced Technology Vehicle Manufacturing Loan Program, LPO has $40 billion available to advance America’s all-of-the-above energy strategy. In leveraging LPO’s remaining authority, we hope to replicate the success of our current portfolio of loans, loan guarantees, and commitments to some of the most innovative clean energy and vehicle manufacturing projects operating in the world today. By doing so, we will build a diverse portfolio that supports new industries and moves us closer to a low-carbon energy future.

Title XVII Open Solicitations

ADVANCED FOSSIL ENERGY PROJECTS LOAN GUARANTEES

LPO has $8.5 billion in loan guarantee authority for Advanced Fossil Energy Projects under the Title 17 Innovative Energy Loan Guarantee Program (Title 17), authorized by the Energy Policy Act of 2005. Title 17 helps eliminate gaps in commercial financing for energy projects in the United States that utilize innovative technology to reduce, avoid, or sequester greenhouse gas emissions.  

Read our two-page fact sheet for an overview of how LPO can finance Advanced Fossil Energy Projects, as well as the solicitation. Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to start a conversation about the project and about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

For more information:

 

 

What value can LPO bring as a lender to my project?

LPO administers three distinct loan programs, but all can provide a similar value to borrowers:

  • Access to Debt Capital: Through Title 17, LPO can provide access to debt capital for large-scale energy projects that use innovative technology. Projects using technology that has not been deployed at commercial-scale often face difficultly accessing debt from private lenders because the technology does not have a history of commercial operation.
  • Flexible, Custom Financing: LPO can provide financing that meets the specific needs of individual borrowers. LPO can be the sole lender to a project or can co-lend with or guarantee loans from private lenders. Additionally, LPO has capacity to finance large projects as a sole lender or to fill gaps in financing as part of a group of lenders.
  • Committed Partnership: Lenders often prefer to engage with a project when the deal is fully formed; however, LPO encourages early engagement during project development. LPO can take the time to dive deep and understand the project and its technology. And after loan closing, LPO remains a valuable partner to borrowers throughout the entire loan term.
  • Specialized Experience: LPO maintains an in-house team of financial, technical, legal, and environmental experts that has expertise with first-of-kind projects and a variety of deal structures. To date, LPO has provided more than $30 billion in debt financing.

Is my project eligible?

A project must meet all of the following requirements to be eligible for a Title 17 loan guarantee:

  • Meet “Eligible Project” requirements as defined by an open solicitation in one or more of the technology areas described therein.
  • Employ new or significantly improved technology as compared to commercial technology in service in the United States at the time the guarantee is issued.
  • Avoid, reduce, or sequester anthropogenic emissions of greenhouse gases or air pollutants.
  • Be located in the United States. Foreign ownership or sponsorship of the projects is permissible as long as the project is located in one of the fifty states, the District of Columbia, or a U.S. territory.
  • Provide a reasonable prospect of repayment.

Learn more about technical eligibility requirements by reviewing the Advanced Fossil Technical Eligibility Reference Guide

Learn more about the types of CCUS (Carbon Capture, Utilization, and Storage), air pollutant controldistributed energy projects, or electric/alternative-fuel vehicle infrastructure projects that LPO could support under the Advanced Fossil Energy Projects solicitation.

In addition, an applicant must demonstrate that it has sufficient funds to carry out the project. Projects benefitting from certain other federal support may not be able to be supported, as described in the applicable solicitation.

Applicants must also meet all applicable eligibility requirements set forth in the Energy Policy Act of 2005, the Final Rule as amended, and the relevant solicitation. 

What kind of financial terms can LPO provide?

LPO can provide flexible, custom financing to meet specific needs of individual borrowers. LPO offers senior, secured debt and can serve as sole lender, or can co-lend with or guarantee loans from other financial institutions and provide to bank syndicates flexible debt capacity that can be upsized or downsized depending on syndication strategy.   

LPO has experience with a range of borrowers, including private project developers, investor-owned utilities, publicly-owned utilities and nonprofits. LPO transactions are typically structured as limited recourse project financings; however, some projects use a corporate lending structure.

For more information about the kind of financial terms LPO can provide, including pricing, terms, and structure, read the Title 17 Lending Reference Guide.

INTEREST RATE

The interest rate for loans that are issued by the Federal Financing Bank (FFB) and backed by a 100 percent DOE loan guarantee will be calculated at the applicable U.S. Treasury rate for the tenor of the loan plus a FFB liquidity spread and a risk-based charge that may be collected up front or as a credit-based interest rate spread over the life of the loan. Learn more about the credit-based interest rate spread for Title 17.

What is the process for obtaining a loan guarantee?

PRE-APPLICATION CONSULTATION

Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to discuss their proposed project and learn about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

FORMAL APPLICATION PROCESS

The following provides a broad overview of the Title 17 application process.

Potential applicants may refer to Suggestions for a Strong Title 17 Innovative Clean Energy Loan Guarantee Application for guidance on preparing an application and should also review all solicitations, supplements, and governing documents on the LPO website. 

Application Part I

  • LPO evaluates project for basic eligibility.
  • LPO aims to complete Part I review within 60 days.
  • LPO invites eligible applicants to submit Part II application.
  • The cost of reviewing a Part I Application will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Application Part II

  • LPO further evaluates the project for factors such as project risk allocation, creditworthiness, technical relevance and merit, technical approach, work plan, construction plan, and legal, environmental and regulatory factors.
  • LPO invites eligible applicants into due diligence.
  • The cost of reviewing a Part II Application will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Due Diligence & Term Sheet Negotiation

  • LPO performs financial, credit, legal, environmental, market due diligence.
  • LPO typically engages external advisors (e.g., legal, technical, financial, market, insurance) to assist in due diligence and structuring. External advisory costs are borne by the applicant.
  • LPO reviews project compliance with federal environmental laws.
  • LPO structures the transaction, underwrites and negotiates term sheet with the applicant.
  • LPO presents the project for credit approval to internal Project Review Committee, external Interagency Review and internal Credit Review Board review. 
  • Upon review and approval by the Secretary of Energy, LPO issues a Conditional Commitment.
  • The cost of the underwriting process, including third-party consultants, will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Loan Closing

  • LPO and the applicant negotiate and finalize the loan guarantee agreement and project documents.
  • LPO and applicant execute the loan guarantee agreement at closing.
  • Applicant fulfills conditions precedent to close.
  • Applicant pays an origination fee in an amount that is sufficient to cover applicable administrative expenses associated with the application review, due diligence and underwriting of the loan guarantee application (including any costs associated with third-party consultants) as well as the pro-rated first annual maintenance fee and credit subsidy cost.

What are the costs & fees?

The following information regarding the costs and fees associated with a Title 17 loan guarantee has been updated effective January 1, 2021, per the enactment of the Energy Act of 2020 (the “Act”).

ORIGINATION FEE DUE ONLY UPON FINANCIAL CLOSE OF A LOAN GUARANTEE

The Act was passed in the 2020 year-end legislative package (Division Z of H.R. 133 - Consolidated Appropriations Act, 2021, Pub.L. 116-260) and amends several provisions of Title XVII of the Energy Policy Act of 2005 (as amended) (42 U.S.C 16512 et seq.) including how LPO will charge and collect costs and fees to cover administrative expenses. The Act requires the Secretary to “charge, and collect on or after the date of financial close of an obligation, a fee for a guarantee in an amount that the Secretary determines is sufficient to cover applicable administrative expenses (including any costs associated with third-party consultants engaged by the Secretary).” 

Effective January 1, 2021, per the updated statute, applicants who reach financial close of a Title 17 loan guarantee will be charged an origination fee. Previously, all applicants were required to submit nonrefundable fees upon submission of Part I and Part II applications, as well as pay costs at different phases of the due diligence process. Now, applicants who reach financial close will pay an origination fee that is sufficient to cover applicable administrative expenses associated with the review and due diligence of their loan guarantee application. Specifically, the origination fee charged to the applicant upon financial close will cover the following costs:

  • Application Fee – This fee will cover costs associated with LPO’s financial and technical review of the Part I and II applications. The fee is $150,000 for projects that request a loan amount that does not exceed $150 million and $400,000 for projects that exceed $150 million.
  • Facility Fee – This fee covers the underwriting process following the Part I and Part II application and is calculated as a percentage of the requested loan amount; and
  • Third Party Consultants Fee – This reimburses LPO for the out-of-pocket costs of third-party consultants engaged by DOE during the due diligence phase, including outside legal consultants, independent engineers, market analysts and financial analysts.

LPO continues to strongly encourage prospective applicants to engage in no-cost pre-application consultations with LPO staff to facilitate a more efficient application review process and a shorter timeline between application submission and financial close.

MAINTENANCE FEE

The annual maintenance fee covers LPO’s administrative expenses, other than extraordinary expenses, in servicing and monitoring the loan guarantee through payment in full. The fee is paid each year in advance, commencing with payment of a pro-rated first annual payment on the closing date of the loan guarantee.

CREDIT SUBSIDY COST

The Federal Credit Reform Act of 1990 (FCRA) requires agencies to estimate the cost to the government of extending or guaranteeing credit. This cost, referred to as subsidy cost, equals the net present value of estimated cash flows from the government minus estimated cash flows to the government over the life of the loan and excluding administrative costs.

The credit subsidy cost is calculated prior to loan closing and LPO, in consultation with the Office of Management and Budget, uses historical information and various assumptions, including the probabilities of default, borrower prepayments, or recoveries, and the projected timing of these events, to make informed predictions about expected future cash flows.

How are greenhouse gas emissions calculated?

Eligible projects must avoid, reduce, or sequester anthropogenic emissions of greenhouse gases. When submitting a Part I application, applicants must submit Attachment C, Summary Lifecycle Greenhouse Gas Emissions Data Worksheet to help LPO complete its lifecycle greenhouse gas emissions analysis of the proposed project.

The worksheet linked above reflects updates issued on January 26, 2015 to better assist applicants by putting carbon inputs and outputs on an annualized basis for ease of inventorying and providing carbon flows with auto-populated fields for ease of carbon accounting. The original Attachment C without these improvements can be found here.

How does LPO treat confidential business information?

Refer to the Treatment of Confidential Materials fact sheet. 

Where can I read the Advanced Fossil Energy Projects solicitation and get more detailed information?

Applicants should review the final solicitation AND all supplements before submitting an application. 

Governing Documents: Refer to the Title 17 Governing Documents webpage.

Environmental Compliance: Refer to the Title 17 Environmental Compliance web page.

FAQs: Refer to Title 17 FAQ webpage.

How do I apply?

Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to start a conversation about the project and about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

In addition to the solicitations, supplements, and governing documents, potential applicants should refer to Suggestions for a Strong Title 17 Innovative Clean Energy Loan Guarantee Application for additional guidance prior to formally applying. Applications should be submitted through the Title 17 online application portal.

View Application Deadlines

 

 

 

Advanced Fossil Energy News

PRESS RELEASE

LPO Announces First Ever Conditional Commitment Offer for Advanced Fossil Project
The Department offered up to $2 billion in loan guarantees for its first ever Advanced Fossil Energy Project to Lake Charles Methanol, LLC
December 21, 2016
Learn more
Department of Energy Releases $8 Billion Solicitation for Advanced Fossil Energy Projects
The Energy Department published a solicitation making up to $8 billion in loan guarantee authority available to support innovative advanced fossil...
January 2, 2014
Learn more
6 Answers to Better Understand Distributed Energy Projects Loan Guarantees
To address interest LPO has received about Distributed Energy Projects, Director of Origination Douglas Schultz answers six questions
June 27, 2016
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DOE Finalizes $1 Billion in New Loan Guarantee Authority and Announces New Application Dates
The Department of Energy's Loan Programs Office announced that $1 billion of additional loan guarantee authority has been finalized and application deadlines have been extended for the Advanced Fossil Energy Projects and Renewable Energy and Efficient ...
October 21, 2015
Learn more
Helping to Finance the Future of Clean Coal
Coal remains an important part of the nation’s all-of-the-above energy strategy and advanced fossil energy technologies will play a large role. The Department is working with the industry to support those innovative technologies from the lab to comme...
August 21, 2014
Learn more

ADVANCED NUCLEAR ENERGY PROJECTS LOAN GUARANTEES

LPO has $10.9 billion in loan guarantee authority for Advanced Nuclear Energy Projects – including $2 billion specifically for front-end projects – under the Title 17 Innovative Energy Loan Guarantee Program (Title 17), authorized by the Energy Policy Act of 2005. Title 17 helps eliminate gaps in commercial financing for energy projects in the United States that utilize innovative technology to reduce, avoid, or sequester greenhouse gas emissions.  

Read our two-page fact sheet for an overview of how LPO can finance Advanced Nuclear Energy Projects, as well as the solicitation. Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to start a conversation about the project and about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

For more information:

 

What value can LPO bring as a lender to my project?

LPO administers three distinct loan programs, but all can provide a similar value to borrowers:

  • Access to Debt Capital: Through Title 17, LPO can provide access to debt capital for large-scale energy projects that use innovative technology. Projects using technology that has not been deployed at commercial-scale often face difficultly accessing debt from private lenders because the technology does not have a history of commercial operation.
  • Flexible, Custom Financing: LPO can provide financing that meets the specific needs of individual borrowers. LPO can be the sole lender to a project or can co-lend with or guarantee loans from private lenders. Additionally, LPO has capacity to finance large projects as a sole lender or to fill gaps in financing as part of a group of lenders.
  • Committed Partnership: Lenders often prefer to engage with a project when the deal is fully formed; however, LPO encourages early engagement during project development. LPO can take the time to dive deep and understand the project and its technology. And after loan closing, LPO remains a valuable partner to borrowers throughout the entire loan term.
  • Specialized Experience: LPO maintains an in-house team of financial, technical, legal, and environmental experts that has expertise with first-of-kind projects and a variety of deal structures. To date, LPO has provided more than $30 billion in debt financing. 

Is my project eligible?

A project must meet all of the following requirements to be eligible for a Title 17 loan guarantee:

  • Meet “Eligible Project” requirements as defined by an open solicitation in one or more of the technology areas described therein.
  • Employ new or significantly improved technology as compared to commercial technology in service in the United States at the time the guarantee is issued.
  • Avoid, reduce, or sequester anthropogenic emissions of greenhouse gases.
  • Be located in the United States. Foreign ownership or sponsorship of the projects is permissible as long as the project is located in one of the fifty states, the District of Columbia, or a U.S. territory.
  • Provide a reasonable prospect of repayment.

Learn more about technical eligibility requirements by reviewing the Advanced Nuclear Technical Eligibility Reference Guide

In addition, an applicant must demonstrate that it has sufficient funds to carry out the project. Projects benefitting from certain other federal support may not be able to be supported, as described in the applicable solicitation.

Applicants must also meet all applicable eligibility requirements set forth in the Energy Policy Act of 2005, the Final Rule as amended, and the relevant solicitation.

What kind of financial terms can LPO provide?

LPO can provide flexible, custom financing to meet specific needs of individual borrowers. LPO offers senior, secured debt and can serve as sole lender, or can co-lend with or guarantee loans from other financial institutions and provide to bank syndicates flexible debt capacity that can be upsized or downsized depending on syndication strategy.   

LPO has experience with a range of borrowers, including private project developers, investor-owned utilities, publicly-owned utilities and nonprofits. LPO transactions are typically structured as limited recourse project financings; however, some projects use a corporate lending structure.

For more information about the kind of financial terms LPO can provide, including pricing, terms, and structure, read the Title 17 Lending Reference Guide.

Interest Rate

The interest rate for loans that are issued by the Federal Financing Bank (FFB) and backed by a 100 percent DOE loan guarantee will be calculated at the applicable U.S. Treasury rate for the tenor of the loan plus a FFB liquidity spread and a risk-based charge that may be collected up front or as a credit-based interest rate spread over the life of the loan. Learn more about the credit-based interest rate spread for Title 17.

What is the process for obtaining a loan guarantee?

PRE-APPLICATION CONSULTATION

Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to discuss their proposed project and learn about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

FORMAL APPLICATION PROCESS

The following provides a broad overview of the Title 17 application process.

Potential applicants may refer to Suggestions for a Strong Title 17 Innovative Clean Energy Loan Guarantee Application for guidance on preparing an application and should also review all solicitations, supplements, and governing documents on the LPO website. 

Application Part I

  • LPO evaluates project for basic eligibility.
  • LPO aims to complete Part I review within 60 days.
  • LPO invites eligible applicants to submit Part II application.
  • The cost of reviewing a Part I Application will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Application Part II

  • LPO further evaluates the project for factors such as project risk allocation, creditworthiness, technical relevance and merit, technical approach, work plan, construction plan, and legal, environmental and regulatory factors.
  • LPO invites eligible applicants into due diligence.
  • The cost of reviewing a Part II Application will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Due Diligence & Term Sheet Negotiation

  • LPO performs financial, credit, legal, environmental, market due diligence.
  • LPO typically engages external advisors (e.g., legal, technical, financial, market, insurance) to assist in due diligence and structuring.
  • LPO reviews project compliance with federal environmental laws.
  • LPO structures the transaction, underwrites and negotiates term sheet with the applicant.
  • LPO presents the project for credit approval to internal Project Review Committee, external Interagency Review and internal Credit Review Board review. 
  • Upon review and approval by the Secretary of Energy, LPO issues a Conditional Commitment.
  • The cost of the underwriting process, including third-party consultants, will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Loan Closing

  • LPO and the applicant negotiate and finalize the loan guarantee agreement and project documents.
  • LPO and applicant execute the loan guarantee agreement at closing.
  • Applicant fulfills conditions precedent to close.
  • Applicant pays an origination fee in an amount that is sufficient to cover applicable administrative expenses associated with the application review, due diligence and underwriting of the loan guarantee application (including any costs associated with third-party consultants) as well as the pro-rated first annual maintenance fee and credit subsidy cost.

What are the costs & fees?

The following information regarding the costs and fees associated with a Title 17 loan guarantee has been updated effective January 1, 2021, per the enactment of the Energy Act of 2020 (the “Act”).

ORIGINATION FEE DUE ONLY UPON FINANCIAL CLOSE OF A LOAN GUARANTEE

The Act was passed in the 2020 year-end legislative package (Division Z of H.R. 133 - Consolidated Appropriations Act, 2021, Pub.L. 116-260) and amends several provisions of Title XVII of the Energy Policy Act of 2005 (as amended) (42 U.S.C 16512 et seq.) including how LPO will charge and collect costs and fees to cover administrative expenses. The Act requires the Secretary to “charge, and collect on or after the date of financial close of an obligation, a fee for a guarantee in an amount that the Secretary determines is sufficient to cover applicable administrative expenses (including any costs associated with third-party consultants engaged by the Secretary).” 

Effective January 1, 2021, per the updated statute, applicants who reach financial close of a Title 17 loan guarantee will be charged an origination fee. Previously, all applicants were required to submit nonrefundable fees upon submission of Part I and Part II applications, as well as pay costs at different phases of the due diligence process. Now, applicants who reach financial close will pay an origination fee that is sufficient to cover applicable administrative expenses associated with the review and due diligence of their loan guarantee application. Specifically, the origination fee charged to the applicant upon financial close will cover the following costs:

  • Application Fee – This fee will cover costs associated with LPO’s financial and technical review of the Part I and II applications. The fee is $150,000 for projects that request a loan amount that does not exceed $150 million and $400,000 for projects that exceed $150 million.
  • Facility Fee – This fee covers the underwriting process following the Part I and Part II application and is calculated as a percentage of the requested loan amount; and
  • Third Party Consultants Fee – This reimburses LPO for the out-of-pocket costs of third-party consultants engaged by DOE during the due diligence phase, including outside legal consultants, independent engineers, market analysts and financial analysts.

LPO continues to strongly encourage prospective applicants to engage in no-cost pre-application consultations with LPO staff to facilitate a more efficient application review process and a shorter timeline between application submission and financial close.

MAINTENANCE FEE

The annual maintenance fee covers LPO’s administrative expenses, other than extraordinary expenses, in servicing and monitoring the loan guarantee through payment in full. The fee is paid each year in advance, commencing with payment of a pro-rated first annual payment on the closing date of the loan guarantee.

CREDIT SUBSIDY COST

The Federal Credit Reform Act of 1990 (FCRA) requires agencies to estimate the cost to the government of extending or guaranteeing credit. This cost, referred to as subsidy cost, equals the net present value of estimated cash flows from the government minus estimated cash flows to the government over the life of the loan and excluding administrative costs.

The credit subsidy cost is calculated prior to loan closing and LPO, in consultation with the Office of Management and Budget, uses historical information and various assumptions, including the probabilities of default, borrower prepayments, or recoveries, and the projected timing of these events, to make informed predictions about expected future cash flows.

How are greenhouse gas emissions calculated?

Eligible projects must avoid, reduce, or sequester anthropogenic emissions of greenhouse gases. When submitting a Part I application, applicants must submit Attachment C, Summary Lifecycle Greenhouse Gas Emissions Data Worksheet to help LPO complete its lifecycle greenhouse gas emissions analysis of the proposed project.

The worksheet linked above reflects updates issued on January 26, 2015 to better assist applicants by putting carbon inputs and outputs on an annualized basis for ease of inventorying and providing carbon flows with auto-populated fields for ease of carbon accounting. The original Attachment C without these improvements can be found here.

How does LPO handle confidential business information?

Refer to the Treatment of Confidential Materials fact sheet. 

Where can I read the Advanced Nuclear Energy Projects solicitation and find more detailed information?

Applicants should review the final solicitation AND all supplements before submitting an application:

  • Annotated Solicitation (January 16, 2020)
    • For the convenience of prospective applicants, this Annotated Solicitation reflects the supplements published and effective since the original issue date through January 16, 2020. The original solicitation and supplements are available on the Title 17 Governing Documents webpage. 

Governing Documents: Refer to the Title 17 Governing Documents webpage

Environmental Compliance: Refer to the Title 17 Environmental Compliance web page

FAQs: Refer to Title 17 FAQ webpage

How do I apply?

Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to start a conversation about the project and about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

In addition to the solicitations, supplements, and governing documents, potential applicants should refer to Suggestions for a Strong Title 17 Innovative Clean Energy Loan Guarantee Application for additional guidance prior to formally applying. Applications should be submitted through the Title 17 online application portal.

View Title XVII Application Deadlines

 

 

LPO Advanced Nuclear News

BLOGS

Vogtle Conditional Commitments Support Energy Infrastructure
DOE's Loan Programs Office offered additional conditional commitments to support energy infrastructure at the Vogtle advanced nuclear project
September 29, 2017
Learn more

PRESS RELEASES

Secretary Perry Announces Financial Close on Additional Loan Guarantees During Trip to Vogtle Advanced Nuclear Energy Project
DOE reaches financial close for up to $3.7 billion in additional guarantees of loans to finance the continued construction of Vogtle Units 3 and 4.
March 22, 2019
Learn more
Secretary Perry Announces Conditional Commitment to Support Continued Construction of Vogtle Advanced Nuclear Energy Project
The Vogtle project is the first new nuclear power plant to be licensed and begin construction in the United States in more than three decades.
September 29, 2017
Learn more
Department of Energy Issues Final $12.5 Billion Advanced Nuclear Energy Loan Guarantee Solicitation
WASHINGTON D.C. — Today, the Department of Energy issued the Advanced Nuclear Energy Projects loan guarantee solicitation, which provides as much as $12.5 billion to support innovative nuclear energy projects as a part of the Administration’s all-o...
December 10, 2014
Learn more
Department of Energy Issues Draft Loan Guarantee Solicitation for Advanced Nuclear Energy Projects
The Department of Energy has issued a draft solicitation that would provide up to $12.6 billion in loan guarantees for Advanced Nuclear Energy Projects, supporting the Administration’s all-of-the-above energy strategy and bringing the nation closer t...
September 30, 2014
Learn more

RENEWABLE ENERGY & EFFICIENT ENERGY PROJECTS LOAN GUARANTEES

LPO has up to $4.5 billion in loan guarantee authority for Renewable Energy and Efficient Energy Projects under the Title 17 Innovative Energy Loan Guarantee Program (Title 17), authorized by the Energy Policy Act of 2005. Title 17 helps eliminate gaps in commercial financing for energy projects in the United States that utilize innovative technology to reduce, avoid, or sequester greenhouse gas emissions.  

Read our two-page fact sheet for an overview of how LPO can finance Renewable Energy and Efficient Energy Projects, as well as the solicitation.

Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to start a conversation about the project and about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

For more information:

 

 

What value can LPO bring as a lender to my project?

LPO administers three distinct loan programs, but all can provide a similar value to borrowers:

  • Access to Debt Capital: Through Title 17, LPO can provide access to debt capital for large-scale energy projects that use innovative technology. Projects using technology that has not been deployed at commercial-scale often face difficultly accessing debt from private lenders because the technology does not have a history of commercial operation.
  • Flexible, Custom Financing: LPO can provide financing that meets the specific needs of individual borrowers. LPO can be the sole lender to a project or can co-lend with or guarantee loans from private lenders. Additionally, LPO has capacity to finance large projects as a sole lender or to fill gaps in financing as part of a group of lenders.
  • Committed Partnership: Lenders often prefer to engage with a project when the deal is fully formed; however, LPO encourages early engagement during project development. LPO can take the time to dive deep and understand the project and its technology. And after loan closing, LPO remains a valuable partner to borrowers throughout the entire loan term.
  • Specialized Experience: LPO maintains an in-house team of financial, technical, legal, and environmental experts that has expertise with first-of-kind projects and a variety of deal structures. To date, LPO has provided more than $30 billion in debt financing. 

 

Is my project eligible?

A project must meet all of the following requirements to be eligible for a Title 17 loan guarantee:

  • Meet “Eligible Project” requirements as defined by an open solicitation in one or more of the technology areas described therein.
  • Employ new or significantly improved technology as compared to commercial technology in service in the United States at the time the guarantee is issued.
  • Avoid, reduce, or sequester anthropogenic emissions of greenhouse gases.
  • Be located in the United States. Foreign ownership or sponsorship of the projects is permissible as long as the project is located in one of the fifty states, the District of Columbia, or a U.S. territory.
  • Provide a reasonable prospect of repayment.

Learn more about technical eligibility requirements by reviewing the Renewable Energy & Efficient Energy Technical Eligibility Reference Guide

Learn more about the types of distributed energy projects, critical materials projects, or electric/alternative-fuel vehicle infrastructure projects that LPO could support under the Renewable Energy and Efficient Energy Projects solicitation.

In addition, an applicant must demonstrate that it has sufficient funds to carry out the project. Projects benefitting from certain other federal support may not be able to be supported, as described in the applicable solicitation.

Applicants must also meet all applicable eligibility requirements set forth in the Energy Policy Act of 2005, the Final Rule as amended, and the relevant solicitation. 

 

What kind of financial terms can LPO provide?

LPO can provide flexible, custom financing to meet specific needs of individual borrowers. LPO offers senior, secured debt and can serve as sole lender, or can co-lend with or guarantee loans from other financial institutions and provide to bank syndicates flexible debt capacity that can be upsized or downsized depending on syndication strategy.   

LPO has experience with a range of borrowers, including private project developers, investor-owned utilities, publicly-owned utilities and nonprofits. LPO transactions are typically structured as limited recourse project financings; however, some projects use a corporate lending structure.

For more information about the kind of financial terms LPO can provide, including pricing, terms, and structure, read the Title 17 Lending Reference Guide.

INTEREST RATE

The interest rate for loans that are issued by the Federal Financing Bank (FFB) and backed by a 100 percent DOE loan guarantee will be calculated at the applicable U.S. Treasury rate for the tenor of the loan plus a FFB liquidity spread and a risk-based charge that may be collected up front or as a credit-based interest rate spread over the life of the loan. Learn more about the credit-based interest rate spread for Title 17.

 

What is the process for obtaining a loan guarantee?

PRE-APPLICATION CONSULTATION

Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to discuss their proposed project and learn about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

FORMAL APPLICATION PROCESS

The following provides a broad overview of the Title 17 application process.

Potential applicants may refer to Suggestions for a Strong Title 17 Innovative Clean Energy Loan Guarantee Application for guidance on preparing an application and should also review all solicitations, supplements, and governing documents on the LPO website. 

Application Part I

  • LPO evaluates project for basic eligibility.
  • LPO aims to complete Part I review within 60 days.
  • LPO invites eligible applicants to submit Part II application.
  • The cost of reviewing a Part I Application will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Application Part II

  • LPO further evaluates the project for factors such as project risk allocation, creditworthiness, technical relevance and merit, technical approach, work plan, construction plan, and legal, environmental and regulatory factors.
  • LPO invites eligible applicants into due diligence.
  • The cost of reviewing a Part II Application will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Due Diligence & Term Sheet Negotiation

  • LPO performs financial, credit, legal, environmental, market due diligence.
  • LPO typically engages external advisors (e.g., legal, technical, financial, market, insurance) to assist in due diligence and structuring. External advisory costs are borne by the applicant.
  • LPO reviews project compliance with federal environmental laws.
  • LPO structures the transaction, underwrites and negotiates term sheet with the applicant.
  • LPO presents the project for credit approval to internal Project Review Committee, external Interagency Review and internal Credit Review Board review. 
  • Upon review and approval by the Secretary of Energy, LPO issues a Conditional Commitment.
  • The cost of the underwriting process, including third-party consultants, will be included in an origination fee, which will be charged to the applicant only upon financial close of the loan guarantee.

Loan Closing

  • LPO and the applicant negotiate and finalize the loan guarantee agreement and project documents.
  • LPO and applicant execute the loan guarantee agreement at closing.
  • Applicant fulfills conditions precedent to close.
  • Applicant pays an origination fee in an amount that is sufficient to cover applicable administrative expenses associated with the application review, due diligence and underwriting of the loan guarantee application (including any costs associated with third-party consultants) as well as the pro-rated first annual maintenance fee and credit subsidy cost.

 

What are the costs & fees?

The following information regarding the costs and fees associated with a Title 17 loan guarantee has been updated effective January 1, 2021, per the enactment of the Energy Act of 2020 (the “Act”).

ORIGINATION FEE DUE ONLY UPON FINANCIAL CLOSE OF A LOAN GUARANTEE

The Act was passed in the 2020 year-end legislative package (Division Z of H.R. 133 - Consolidated Appropriations Act, 2021, Pub.L. 116-260) and amends several provisions of Title XVII of the Energy Policy Act of 2005 (as amended) (42 U.S.C 16512 et seq.) including how LPO will charge and collect costs and fees to cover administrative expenses. The Act requires the Secretary to “charge, and collect on or after the date of financial close of an obligation, a fee for a guarantee in an amount that the Secretary determines is sufficient to cover applicable administrative expenses (including any costs associated with third-party consultants engaged by the Secretary).” 

Effective January 1, 2021, per the updated statute, applicants who reach financial close of a Title 17 loan guarantee will be charged an origination fee. Previously, all applicants were required to submit nonrefundable fees upon submission of Part I and Part II applications, as well as pay costs at different phases of the due diligence process. Now, applicants who reach financial close will pay an origination fee that is sufficient to cover applicable administrative expenses associated with the review and due diligence of their loan guarantee application. Specifically, the origination fee charged to the applicant upon financial close will cover the following costs:

  • Application Fee – This fee will cover costs associated with LPO’s financial and technical review of the Part I and II applications. The fee is $150,000 for projects that request a loan amount that does not exceed $150 million and $400,000 for projects that exceed $150 million.
  • Facility Fee – This fee covers the underwriting process following the Part I and Part II application and is calculated as a percentage of the requested loan amount; and
  • Third Party Consultants Fee – This reimburses LPO for the out-of-pocket costs of third-party consultants engaged by DOE during the due diligence phase, including outside legal consultants, independent engineers, market analysts and financial analysts.

LPO continues to strongly encourage prospective applicants to engage in no-cost pre-application consultations with LPO staff to facilitate a more efficient application review process and a shorter timeline between application submission and financial close.

MAINTENANCE FEE

The annual maintenance fee covers LPO’s administrative expenses, other than extraordinary expenses, in servicing and monitoring the loan guarantee through payment in full. The fee is paid each year in advance, commencing with payment of a pro-rated first annual payment on the closing date of the loan guarantee.

CREDIT SUBSIDY COST

The Federal Credit Reform Act of 1990 (FCRA) requires agencies to estimate the cost to the government of extending or guaranteeing credit. This cost, referred to as subsidy cost, equals the net present value of estimated cash flows from the government minus estimated cash flows to the government over the life of the loan and excluding administrative costs.

The credit subsidy cost is calculated prior to loan closing and LPO, in consultation with the Office of Management and Budget, uses historical information and various assumptions, including the probabilities of default, borrower prepayments, or recoveries, and the projected timing of these events, to make informed predictions about expected future cash flows.

Congress appropriated $160 million to cover the credit subsidy costs associated with potential loan guarantees for Renewable Energy Projects or Efficient End-Use Projects. LPO anticipates that it will allocate some of the appropriated credit subsidy to cover a portion of the credit subsidy costs related to a guaranteed loan for any qualifying project as long as there is remaining and unallocated appropriated credit subsidy.

 

How are greenhouse gas emissions calculated?

Eligible projects must avoid, reduce, or sequester anthropogenic emissions of greenhouse gases. When submitting a Part I application, applicants must submit Attachment C, Summary Lifecycle  Greenhouse Gas Emissions Data Worksheet to help LPO complete its lifecycle greenhouse gas emissions analysis of the proposed project.

The worksheet linked above reflects updates issued on January 26, 2015 to better assist applicants by putting carbon inputs and outputs on an annualized basis for ease of inventorying and providing carbon flows with auto-populated fields for ease of carbon accounting. The original Attachment C without these improvements can be found here.

How does LPO treat confidential business information? 

Refer to the Treatment of Confidential Materials fact sheet. 

Where can I read the the Renewable Energy and Efficient Energy Projects solicitation and find more detailed information?

Applicants should review the final solicitation AND all supplements before submitting an application.

Governing Documents: Refer to the Title 17 Governing Documents webpage

Environmental Compliance: Refer to the Title 17 Environmental Compliance webpage.

FAQs: Refer to Title 17 FAQ webpage.

 

How do I apply?

Potential applicants are encouraged to engage directly with LPO for no-fee, no-commitment consultations to start a conversation about the project and about LPO's process before formally applying. Email lgprogram@hq.doe.gov to request a consultation with an LPO staff member.

In addition to the solicitations, supplements, and governing documents, potential applicants should refer to Suggestions for a Strong Title 17 Innovative Clean Energy Loan Guarantee Application for additional guidance prior to formally applying. Applications should be submitted through the Title 17 online application portal.

Application Deadlines

 

 

FACTS SHEETS

Renewable Energy & Efficient Energy Solicitation Fact Sheet
Renewable Energy & Efficient Energy Solicitation Fact Sheet
January 23, 2020
Learn more
DISTRIBUTED ENERGY PROJECTS FACT SHEET
Fact sheet regarding Title XVII eligibility of Distributed Energy Projects
August 24, 2015
Learn more
FACT SHEET: ELIGIBILITY FOR THE DEPLOYMENT AND MANUFACTURING OF INFRASTRUCTURE FOR ALTERNATIVE FUEL VEHICLES AND ELECTRIC VEHICLES
U.S. Department of Energy Loan Programs Office (LPO) fact sheet regarding eligibility for the deployment and manufacturing of infrastructure for alternative fuel vehicles and electric vehicles.
January 9, 2017
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LPO Renewable Energy and Efficient Energy News

Energy Department Makes Additional $4 Billion in Loan Guarantees Available for Innovative Renewable Energy and Efficient Energy Projects
Washington D.C. — In support of the President’s Climate Action Plan, the Department of Energy issued a loan guarantee solicitation today, making as much as $4 billion in loan guarantees available for innovative renewable energy and energy efficienc...
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LPO Financing Can Fuel a New Wave of Vehicles
Loan Programs Office clarified eligibility for alternative fuel vehicle infrastructure under Title XVII and ATVM
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Mesquite Solar Highlights How DOE Loan Guarantees Helped Launch the Utility-Scale PV Solar Market
In 2011, LPO issued loan guarantees to the first 5 PV projects larger than 100 MW in the U.S. An additional 45 projects have since been financed
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How Loan Guarantees Can Put a Charge in Electric Vehicles
A new supplement to the Renewable Energy and Efficient Energy Projects loan guarantee solicitation clarifies EV charging infrastructure eligibility
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6 Answers to Better Understand Distributed Energy Projects Loan Guarantees
To address interest LPO has received about Distributed Energy Projects, Director of Origination Douglas Schultz answers six questions
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DOE Finalizes $1 Billion in New Loan Guarantee Authority and Announces New Application Dates
The Department of Energy's Loan Programs Office announced that $1 billion of additional loan guarantee authority has been finalized and application deadlines have been extended for the Advanced Fossil Energy Projects and Renewable Energy and Efficient ...
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Clarifying Technology Eligibility for Title XVII Loan Guarantee Solicitations
LPO has heard from technology providers and project developers with a wide range of exciting technologies and has received a robust pipeline of applications. However, during the course of our conversations with technology providers and project develope...
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Peter W. Davidson
Peter W. Davidson served as Executive Director of the Loan Programs Office (LPO) at the U.S. Department of Energy from May 2013 to June 2015. Mr. Davidson oversaw the program’s more than $30 billion portfolio of clean energy and advanced vehicle loans and loan guarantees, making it the largest project finance organization in the U.S. government. Peter W. Davidson served as Executive Director of the Loan Programs Office (LPO) at the U.S. Department of Energy from May 2013 to June 2015. Mr. Davidson oversaw the program’s more than $30 billion portfolio of clean energy and advanced vehicle loans and loan guarantees, making it the largest project finance organization in the U.S. government.
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