The U.S. Department of Energy (DOE) Loan Programs Office (LPO) is a $40+ billion lending platform that finances next-generation U.S. energy infrastructure and advanced vehicle technology, serving as a bridge to bankability for breakthrough projects and technologies and de-risking them at early stages of commercialization so they can reach full market acceptance. LPO provides loans and loan guarantees to projects that have demonstrated transformative potential to accelerate the decarbonization of the U.S. economy, with a focus on concepts that combine next-generation technology with effective financial models.
LPO is a committed partner to borrowers throughout the lifetime of the project, from the first pre-application consultation and formal application process to term sheet negotiation and negotiation of final loan documents through final loan repayment. A key milestone in LPO’s process is the issuance of a conditional commitment, which is defined in DOE’s regulations and reflects an offer of a term sheet for a loan or loan guarantee by DOE to the borrower, subject to the satisfaction of certain conditions. The conditional commitment may specify additional steps the borrower must take to proceed toward financial close on the loan or loan guarantee, which could include fulfilling particular legal, contractual, and financial requirements. Also, the Secretary of Energy has the authority to terminate a conditional commitment for any reason at any time prior to issuing a Title 17 loan guarantee.
No funds are disbursed to a project until the loan or loan guarantee has completed definitive financing documents and the requirements for financial close, including meeting all conditions to disbursement as specified in the loan or loan guarantee agreement. The time between conditional commitment and financial close varies by project.
The vast majority of the conditional commitments issued by DOE have resulted in a loan or loan guarantee. However, in some cases, either DOE or the project sponsor ultimately decide not to proceed to financial close.
Learn more about LPO’s application process and reach out to us today at LPO@hq.doe.gov to learn more about how your project might qualify for financing.