I am pleased to announce that today the Department has issued its first solicitation for the Tribal Energy Loan Guarantee Program (TELGP). Under TELGP, the Department can guarantee up to $2 billion in loans to support economic opportunities for tribes through energy development projects and activities.
Our team at the Loan Programs Office (LPO) has collaborated closely with our colleagues in DOE’s Office of Indian Energy Policy and Programs to develop TELGP. We have also spent the past several months learning more about the unique energy needs and challenges of Native American and Alaska Native communities by attending conferences, engaging in one-on-one meetings with tribal leaders, and considering written comments. Taking the time and devoting the resources to better understand tribal energy needs and financing challenges is a key component of TELGP, and fills a current gap in the tribal energy financing market.
Tribes can often face challenges in accessing capital for energy infrastructure projects due to commercial lenders’ lack of experience in lending to tribes. Projects that could greatly expand energy infrastructure and grow tribal economies are sometimes unable to obtain financing because a commercial lender has never before worked with a tribal borrower.
The Department is uniquely positioned to fill that gap because it has the expertise and time to dive deep into unique projects and borrowers. Our mission is to help commercial lenders better understand the unknown about a project or a borrower so that the private sector can take over future projects.
For TELGP, the Department will do this by offering partial loan guarantees and working cooperatively with commercial lenders. The partial loan guarantee model is based on the successful Financial Institution Partnership Program (FIPP) which the Department previously used to help projects leverage public and private lending. FIPP helped to mobilize $9.1 billion of both debt and private equity for energy infrastructure projects and helped catalyze the markets for large-scale solar and wind projects.
We hope to replicate that success so that tribes can have expanded access to private capital for the economic benefit of their communities.