On December 19, 2019, the Internal Revenue Service (IRS) issued its final guidance for investments in Qualified Opportunity Zones (QOZ). The 2017 Tax Cuts and Jobs Act created Opportunity Zones to spur economic development and job creation in economically-distressed communities across the United States by providing tax benefits to investors that invest eligible capital in these areas. There are nearly 9,000 designated Opportunity Zones, some in every state and territory. For a complete map and to learn more, visit OpportunityZones.gov.
The creation of Opportunity Zones means potential new equity capital investments for energy projects or auto manufacturing projects in the designated communities. These projects could be complemented by debt capital, through DOE’s Loan Programs Office (LPO). While LPO does not consider whether a project is located in an Opportunity Zone as part of programs’ eligibility criteria, projects in the following areas may want to consider LPO financing:
- Building new manufacturing facilities or reequipping, modernizing, or expanding existing facilities that produce fuel-efficient light-duty vehicles or eligible components could be supported under the Advanced Technology Vehicles Manufacturing Loan Program.
- Advanced fossil, nuclear, and renewable energy projects could be supported by loan guarantees from the Title 17 Innovative Energy Loan Guarantee Program.
- Federally recognized American Indian tribes, Alaska Native Corporations, or tribally owned entities could be eligible for partial loan guarantees under the Tribal Energy Loan Guarantee Program.
To learn how debt capital from LPO could potentially complement eligible investments in QOZs, please reach out for a pre-application consultation with a member of our staff by emailing LPO@hq.doe.gov.