BUILDING A BRIDGE TO BANKABILITY
The central challenge the United States faces in reaching its climate goals is a deployment challenge – not an invention challenge.
While significant capital is available for decarbonization technologies, these projects can still lack access to adequate debt capital. LPO fills this gap in commercial deployment by serving as a bridge to bankability for innovative and high-impact energy technologies, providing them with access to needed loans and loan guarantees when private lenders cannot or will not until a given technology has reached full market acceptance.
LPO provides a bridge to bankability for those technologies to cross the final milestones to commercialization:
- The first commercial-scale deployment, to address the engineering scale-up challenges and demonstrate technology effectiveness at scale;
- The next few commercial-scale deployments, to demonstrate the ability to mitigate construction risks and address engineering optimization;
- Commercial scale-up, to progress along the learning curve, lower costs, and establish customer demand;
- Commercial debt market education, to overcome private debt market misunderstanding and gain commercial debt access.
The starting point of LPO’s committed partnership with its borrowers is through the office’s Outreach and Business Development Division, which brings together an internal team of energy experts with deep experience across the financial, technical, legal, risk, and environmental fields to help borrowers move through pre-application consultations and the application process, and through the due diligence and underwriting process led by LPO’s Origination Division. After loan closing, LPO’s Portfolio Management Division maintains this borrower partnership through construction, project operation and maintenance, and eventual final loan repayment. This approach is essential to achieving project milestones and overall project success while protecting taxpayer interests. By engaging early and often with applicants, the LPO team maximizes transparency and manages risk with a combination of proactive monitoring, discussions of emergent issues, and action to maximize project success, which can include approving distributions or equity ownership sales.