Primer on DOE’s Loan Guarantee program in the U.S.
Website of the DOE Loan Guarantee program, snapshot
Alexander Richter
29 May 2010
The website of NREL provides a primer with details on the U.S. Department of Energy's Loan Guarantee program, that provides a relatively good and quick overview of the program.
Just came across this quite good overview on the U.S. Department of Energy’s Loan Guarantee program published on the website of NREEL. I thought that this could be of interest to many, that’s why I post part of it here, for the full site see link provided below.
“The Department of Energy (DOE) Loan Guarantee (LG) program offers significant promise to stimulate capitalization of large renewable energy (RE) projects. Through the program, the government guarantees debt associated with energy production or manufacturing facilities relevant to renewable and other energy technologies. Government guarantee on the debt lowers the risk and required yield on the funds raised and makes more capital available to the industry.
Title XVII of the Energy Policy Act of 2005 (EPAct 2005) created the LG program; it was later expanded through the American Recovery and Reinvestment Act (Recovery Act) in February, 2009 (DOE, 2009). To date, only 3 renewable energy LG applications (2 manufacturing, 1 production) have been conditionally approved to date. One additional “clean technology” project (Red River Environmental Products, LLC to build an activated carbon manufacturing facility) was also approved. (DOE, 2009).
The LG program is considered a critical element to financing projects with limited commercial exposure. Concentrating Solar Power (CSP) projects, in particular, are highly dependent on the LG program. According to some experts in the field, the financial markets are simply unable to capitalize these billion dollar enterprises without government support at this juncture (Bar-Lev, 2009).”
For the full primer see link below.
Source: RE Project Finance (NREL)
