- How do I know which Title 17 project category is the best fit for my project?
- What qualifies as a SEFI?
- What types of projects can EIR support?
- Where can I find examples of EIR-eligible (section 1706-eligible) projects?
- Which Title 17 Program category do alternative proteins, large-scale food waste reduction, and other food-related solutions fall under?
- Is there a minimum or maximum project or loan size?
- What costs qualify as eligible Project Costs?
- When evaluating an applicant’s financial assumptions related to offtakers or business partners, does LPO need to see contracts in place, or are potential clients/contracts with documentation enough?
- What technical readiness level (TRL) is needed for Title 17 Financing?
- Is a front-end engineering and design (feed) study a requirement to submit a Title 17 application
- Are there circumstances in which a feed study is not applicable?
- Do Build America, Buy America (BABA) requirements apply to utilities?
- Do Davis-Bacon prevailing wage requirements apply to work conducted prior to initial communication with LPO?
Application Process and Loan Terms
- Who can apply for LPO financing?
- When should I approach LPO about a potential application?
- How do I apply?
- Can I file multiple applications?
- How do LPO’s offerings and the LPO loan application process differ from other DOE offerings and funding application processes?
- How are greenhouse gas emissions calculated?
- How long does the LPO application process take?
- I hear the fee structure is changing. What has changed?
- What kind of financial terms can LPO provide?
- How does LPO financing interact with tax credits, federal grants, and other federal support?
- Does LPO financing trigger compliance obligations with other federal requirements?
- How does LPO treat confidential business information?
- How do Credit Subsidy Costs apply to loans under the Title 17 Clean Energy Financing Program?
- How is the risk-based charge determined?
- How do the fees differ between the direct loans from the U.S. Treasury’s Federal Financing Bank and the guaranteed loans to commercial lenders?
- How does LPO financing interact with federal grants, cooperative agreements, and other (non-tax credit) federal support?
- Is a collateral appraisal required for Title 17 financing?
- Is the 3- to 8-page suggested length for the community benefits plan a maximum allowable length?
How do I know which Title 17 project category is the best fit for my project?
First, potential applicants should familiarize themselves with eligibility criteria described in the Title 17 Program Guidance. LPO’s OBD team will next meet with potential applicants to evaluate best category and if LPO financing is a good fit for their project.
What qualifies as a SEFI?
Projects can qualify for Title 17 financing under the SEFI-supported project category if they are from a 1703 eligible technology category and receive meaningful financial support or credit enhancements from a SEFI. A SEFI is an entity established by a State, or an Indian Tribal entity or Alaska Native corporation, to provide financing support or credit enhancements for eligible projects and to take steps to reduce financial barriers to the deployment of existing and new eligible projects. SEFI-supported projects are exempted from the innovation requirement, thereby expanding eligibility for LPO loan guarantees to projects that incorporate commercial technologies and aggregations of technology-diverse projects.
What types of projects can EIR support?
Energy Infrastructure Reinvestment (EIR) financing can support projects that either: 1) retool, repower, repurpose, or replace Energy Infrastructure that has ceased operations; provided that if the project involves electricity generation through the use of fossil fuels, it is required to have controls or technologies to avoid, reduce, utilize, or sequester air pollutants and anthropogenic emissions of greenhouse gases; or 2) projects that enable operating Energy Infrastructure to avoid, reduce, utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases. The scope of a project receiving EIR project financing may include remediation of environmental damage associated with Energy Infrastructure.
Where can I find examples of EIR-eligible (section 1706-eligible) projects?
Which Title 17 Program category do alternative proteins, large-scale food waste reduction, and other food-related solutions fall under?
Under the Innovative Energy and Innovative Supply Chain project categories, LPO can consider projects relating to industrial decarbonization technologies. LPO encourages applicants to refer to the DOE Industrial Decarbonization Roadmap, which includes an analysis of the food and beverage sector. Potential eligibility of food and beverage projects will be considered on a case-by-case basis.
Is there a minimum or maximum project or loan size?
LPO does not set a minimum loan size; however, due to some of the fixed costs associated with receiving a loan guarantee from LPO, LPO loan guarantees are typically $100 million or more. LPO can guarantee up to 80% of eligible project costs, although project cashflows and credit risk considerations often lower leverage ratios with many projects ending up in the 50 to 70% range.
What costs qualify as eligible Project Costs?
Title 17 eligible Project Costs are defined at §609.10 of the Title 17 Regulations, and in the Program Guidance (see “Loan Size and Eligible Project Costs” on pages 31-33). As stated in the Program Guidance, “Project Costs of an Eligible Project are those costs, including escalation and contingencies, that are expended or accrued by a Borrower and are necessary, reasonable, customary, and directly related to the design, engineering, financing, construction, startup, commissioning, and shakedown of an Eligible Project.” Note that expenses incurred after startup, commissioning, and shakedown of the facility as well as operating costs are not eligible for LPO financing.
When evaluating an applicant’s financial assumptions related to offtakers or business partners, does LPO need to see contracts in place, or are potential clients/contracts with documentation enough?
Applicants must demonstrate that their project has a reasonable prospect of repayment. In assessing reasonable prospect of repayment, LPO will consider the strength of the contractual terms of the project (if commercially reasonably available) and the forecast of noncontractual cash flows, among other considerations. Please see pages 41-43 (“Part II Evaluation Criteria”) of the Program Guidance for additional information.
WHAT TECHNICAL READINESS LEVEL (TRL) IS NEEDED FOR TITLE 17 FINANCING?
Projects seeking LPO financing under Title 17 must demonstrate that they involve technically viable and commercially ready technology. Commercially ready technology is defined as having been demonstrated at near commercial-scale under expected process conditions with results supporting the expected performance of the proposed deployment. Typically, this is the equivalent of achieving a technical readiness level 8. LPO can consider applications for projects at an earlier stage of development (i.e., a lower TRL level) if there is a clear path toward commercial readiness over the course of the application process. Applications will be denied if the proposed project is for research, development, or demonstration. More information regarding Technical Readiness Levels is available here: Technology Readiness Assessment Guide (doe.gov).
IS A FRONT-END ENGINEERING AND DESIGN (FEED) STUDY A REQUIREMENT TO SUBMIT A TITLE 17 APPLICATION?
Pursuant to the Title 17 Part I application instructions, a FEED study is “encouraged for all projects” (Part I instructions, page 10). While it is not a requirement for entering or completing a Part I application, it can provide a useful summary of project requirements and demonstrate project readiness. If not received in the Part I application, LPO will encourage an applicant to provide a FEED study as part of a Part II application submission. A FEED study can support LPO’s assessment of a project’s reasonable prospect of repayment and is often considered a prerequisite for an Independent Engineer’s report (required in a Part II application). In many cases, FEED studies can provide critical input to Engineering, Procurement, and Construction contracts and can inform site selection decisions. Inclusion of a FEED study in Part I can, therefore, facilitate LPO’s review of the application and accelerate the timeline for the overall application process.
ARE THERE CIRCUMSTANCES IN WHICH A FEED STUDY IS NOT APPLICABLE?
The scope of a FEED study may need to be adjusted to reflect project characteristics. For example, in the case of a virtual power plant project, the information contained in a FEED study (scope, design/technical drawings, mechanical design, electrical design, costs and budget, etc.) will be required for any physical/hardware component of a VPP project. This could take the form of a traditional FEED study or something analogous that contains the necessary information. A similar level of rigor will be required for critical software components that need to be developed as part of the project.
In other cases, a FEED study may not be applicable in a Part I application. For example, where a regulated utility is proposing to undertake a portfolio of project investments over time. In these cases, LPO may require that the applicant or contracted developers provide planning documents and other project details for identified investments as part of the loan application process or loan documents.
DO BUILD AMERICA, BUY AMERICA (BABA) REQUIREMENTS APPLY TO UTILITIES?
BABA requirements are described in the Program Guidance (see Section E, “Federal Requirements”). These requirements apply if the Title 17 borrower is a “non-Federal entity.” States, local governments, Indian tribes, institutions of higher education, and non-profit organizations are considered “non-Federal entities”. As a general matter, for-profit organizations are not subject to BABA requirements. Consequently, BABA requirements would not apply to regulated utilities that are for-profit entities. The requirements may apply to municipal, co-op, or other non-profit utilities (state regulated or otherwise), for which LPO can advise on a case-by-case basis.
DO DAVIS-BACON PREVAILING WAGE REQUIREMENTS APPLY TO WORK CONDUCTED PRIOR TO INITIAL COMMUNICATION WITH LPO?
Generally speaking, LPO encourages prevailing wage paid on all aspects of a project. Compliance with Davis-Bacon prevailing wage is required beginning with the “construction, prosecution, or repair” of the project, “regardless of whether the closing of the DOE loan guarantee has occurred.” (See the Program Guidance, Section E, “Federal Requirements.”) An exception to the Davis-Bacon prevailing wage requirements is contemplated for work conducted prior to contacting LPO if the Administrator of the Wage and Hour Division, Employment Standards Administration at the Department of Labor finds that there is no evidence of intent to apply for federal funding or assistance prior to the start of construction.
Application Process and Loan Terms
Who can apply for LPO financing?
Title 17 loan financing can be accessed by a wide range of entities. LPO has experience working with project developers, clean tech manufacturers and service providers, regulated utilities, public power entities, and independent power producers, among others.
When should I approach LPO about a potential application?
Interested applicants are invited to request a pre-application consultation at any time. LPO’s Outreach and Business Development (OBD) staff will meet with potential applicants and provide step-by-step assistance to navigate the application process. Requestors should come prepared with a description of the proposed project and identified financing needs.
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. Click here to request a consultation with an LPO staff member. LPO encourages these inquiries to include relevant project details and likely project category to allow us to direct your inquiry to appropriate staff.
Potential applicants should review publicly available information, including the Title 17 Program Guidance. Potential applicants should also review LPO’s suggestions for a strong Title 17 application here for additional guidance prior to contacting LPO.
Can I file multiple applications?
Applicants may apply for more than one Title 17 loan guarantee, but an applicant is limited to one application for an Innovative Energy or Innovative Supply Chain Project using a particular technology. An applicant may submit a single application for multiple projects using different technologies or at different sites; however, LPO may require the applicant to separate such projects into multiple applications at any time during the application process.
How are greenhouse gas emissions calculated?
Most Title 17 projects are required to avoid, reduce, utilize, or sequester air pollutants or anthropogenic emissions of greenhouse gases. As part of the Part I Application, applicants must submit a Lifecycle GHG Emissions Data Worksheet to help LPO complete its lifecycle greenhouse gas emissions analysis of the proposed project (see the Program Guidance for exemptions and more information).
How do LPO’s offerings and the LPO loan application process differ from other DOE offerings and funding application processes?
LPO is focused on project deployment, typically financing projects that are at later stage (ready for commercial deployment) than other DOE offices that focus on technology development or demonstration financial assistance programs. LPO provides long-term, senior debt for the construction of clean energy projects that may be challenged in obtaining adequate, flexible debt financing on competitive terms from private lenders. Unlike other DOE financial assistance programs, LPO’s process is not competitive. Applications may be submitted at any time and are not limited to an open solicitation period. The program is technology agnostic, and LPO will consider applications across sectors.
How long does the LPO application process take?
The timeline from first contact with LPO to conditional commitment can take anywhere from six months to more than a year and is largely dependent on the applicant’s preparedness and ability to provide required documents.
I hear the fee structure is changing. What has changed?
There are no application fees associated with submission of a Title 17 application. Applicants are responsible for third-party advisor costs, which begin in the due diligence phase. Applicants enter into sponsor payment letters with each third-party advisor costs and pay as these costs are incurred. These third-party expenses constitute Eligible Projects Costs and can be amortized in the loan itself. Additionally, applicants pay a facility fee at close and maintenance fees annually.
What kind of financial terms can LPO provide?
How does LPO financing interact with tax credits, federal grants, and other federal support?
LPO's loan guarantees can be stacked with clean energy tax credits, including energy production and investment tax credits. DOE cannot issue loan guarantees to projects that are expected to benefit from certain other forms of federal support (“Federal Support Restriction”), including grants, cooperative agreements, or other loan guarantees from federal agencies or entities. Please review page 52 of the Title 17 Program Guidance for detailed information on federal support restrictions.
Does LPO financing trigger compliance obligations with other federal requirements?
Federal law requires that certain reviews and project requirements be met for a project to receive LPO support under Title 17, including: NEPA compliance, prevailing wage requirements, Cargo-Preference Act, and Build America, Buy America. Information about these requirements is available in the Program Guidance, and through consultation with LPO Staff.
How does LPO treat confidential business information?
Confidential business information shared with the Loan Programs Office (LPO) is protected by Federal laws, regulations and Department of Energy (DOE) policies. Please refer to the Treatment of Confidential Materials fact sheet.
How do Credit Subsidy Costs apply to loans under the Title 17 Clean Energy Financing Program?
DOE will allocate appropriated funds to pay the credit subsidy cost of a loan guarantee at the time DOE offers a conditional commitment, subject to the availability of appropriated funds. DOE anticipates having adequate appropriated funds to pay the credit subsidy costs of loan guarantees and will provide significant advance notice to the public and applicants if it expects to exhaust such appropriated funds. In that case, borrowers in the Title 17 program would be required to directly pay the credit subsidy cost prior to, or at the time of, the conditional commitment. For more information, see “Credit Subsidy Cost” on page 36 of the Program Guidance.
How is the risk-based charge determined?
The risk-based charge is determined based on the credit risk of the project. It is intended to make DOE’s charges closer, but not equal, to commercial markets. For loans issued by non-federal lenders but guaranteed by DOE, the interest rate will be described in the term sheet and may include a risk-based charge. The total interest rate may not exceed a level that the Secretary determines appropriate taking into account the prevailing interest rate in the private sector for similar loans and risks. For more information, see “Interest Rate” on page 35 of the Program Guidance.
How do the fees differ between the direct loans from the U.S. Treasury’s Federal Financing Bank and the guaranteed loans to commercial lenders?
Applicants can work with LPO to receive (1) a direct loan from U.S. Treasury’s Federal Financing Bank (FFB) backed by a 100% “full faith and credit” DOE guarantee through LPO or (2) an LPO partial guarantee of commercial debt from eligible private sector lenders. In both cases, applicants are responsible for certain third-party expenses, including the costs of third-party advisors retained by LPO; a non-refundable facility fee, payable at closing; and a periodic maintenance fee, payable annually.
How does LPO financing interact with federal grants, cooperative agreements, and other (non-tax credit) federal support?
DOE cannot finance projects that are expected to benefit from certain other forms of federal support, including grants, cooperative agreements, or other loan guarantees from federal agencies or entities. This so-called federal support restriction exists to ensure that an LPO loan is not repaid using other federal dollars. Federal support that pre-dates an LPO loan or that impacts an aspect of the project that is fully separate from the LPO loan may not trigger federal support restrictions.
Generally, companies or projects that have previously benefitted from federal support but no longer do (e.g., have exhausted the grant or repaid the loan in question) will not encounter federal support restrictions. If a company or project currently benefits from federal support, the applicant should evaluate whether this federal support impacts the same project or phases of a project for which the applicant is seeking LPO financing.
LPO staff will work with applicants to understand how federal support restrictions impact each potential project. DOE encourages potential applicants that may seek or anticipate federal support for a proposed project to arrange a pre-application consultation to better understand the potential impact to any loan guarantee issued under Title 17.
IS A COLLATERAL APPRAISAL REQUIRED FOR TITLE 17 FINANCING?
A third-party collateral appraisal is not required for a Part I or Part II application. However, in many cases, the final loan documents will require the delivery of a collateral appraisal on or prior to the project’s commercial operations date.
IS THE 3- TO 8-PAGE SUGGESTED LENGTH FOR THE COMMUNITY BENEFITS PLAN A MAXIMUM ALLOWABLE LENGTH?
Applicants are required to submit a Community Benefits Plan (CBP) as part of their Part II application. LPO seeks a clear, focused, and credible demonstration of the applicant’s consideration for and plans to provide benefits and mitigate harms to communities. 3-to-8 pages should be sufficient to concisely describe the CBP, which can summarize or reference other parts of the application where applicable, and which should not impose an undue burden or cost on the applicant to prepare. CBPs longer than 8 pages should not be assumed to be stronger. Applicants may attach additional supporting material as relevant, such as existing community or labor agreements or documentation of planned community, environmental or labor initiatives. Suggested features of a CBP are described more fully with Part II application instructions.