When prominent entrepreneur Jigar Shah became director of the Department of Energy’s Office of Loan Programs in 2021, he had one main mission.Dollars outside the door.”
The firm is currently providing financing for clean energy technologies that are difficult to borrow from banks and have received significant funding from the Inflation Control Act, ahead of President-elect Donald Trump’s inauguration in January. We are rushing to do just that. The president-elect, flanked by Republican majorities in both the House and Senate, is expected to target unspent funds under IRAs, including the LPO program, leaving billions of dollars in loans that have not yet been approved or closed. You will be exposed to danger.
The office has been ramping up activity in recent weeks as Inauguration Day approaches. Last Monday alone, LPO announced four new conditional commitments on loans and loan guarantees and finalized pending offers.
On Tuesday, long-term energy storage company Eos closed $303.5 million DOE loan guarantee Contributing to expansion of production scale. A day earlier, the DOE announced it plans to lend up to $7.5 billion to help raise funds. Two electric vehicle battery manufacturing plants Located in Kokomo, Indiana. And a week earlier, the agency announced nearly $5 billion in conditional loan guarantees to raise funds. Grain Belt Express Phase 1, Interregional transmission lines It will run between Ford County, Kansas and Callaway County, Missouri.
Last Monday, the agency also announced a conditional commitment for a $6.6 billion direct loan to Rivian. EV manufacturing factory SunWealth Provides Up to $290 Million in Loan Guarantee for Stanton Springs North, Georgia 1,000 solar power generation systems and battery storage systems Across 27 states.
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Under the Biden administration, the LPO has so far provided just under $55 billion in 32 deals in battery and EV manufacturing, nuclear reactors, clean hydrogen facilities, virtual power plants, and critical mineral projects. The majority of LPO investments are I went to a Republican district.According to an analysis by Politico.
Most of the loan deals announced by the LPO, valued at about $41 billion, remain conditional, with loans and loan guarantees not yet finalized and dependent on companies meeting certain benchmarks.
Legal experts said the LPO’s 14 completed loans, totaling more than $13 billion in investments, should be safe from Republican pushback, but it could be much easier to defer or cancel conditional funds. are. “The immediate aftermath of a new president’s inauguration will likely be followed by a period of inaction regarding financial aid awards being negotiated and funding opportunities announced.” I wrote Hogan Lovells attorney Mary Ann Sullivan;
The Republican-controlled Congress could reduce yet-to-be-mandated funding to offset the costs of extending the Trump administration’s 2017 tax cuts. National debt is $4.6 trillion Over the next 10 years.
As of November 30th, the secretariat is 212 outstanding applications A total of $324 billion in loans is requested. In November, LPO increased its estimated remaining loan authority to: Approximately $400 billion.
LPO was established in 2005 to support innovative clean energy projects. In Shah’s words,Building a bridge to banking” targets technologies that have not yet reached the large-scale adoption needed to attract commercial lenders. The Inflation Control Act significantly strengthened the agency’s lending authority, increasing its authority from $40 billion to more than $400 billion.
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With the Republican triumvirate in power, it’s unclear what the final outcome of the loan program will be. Project 2025, the Heritage Foundation’s blueprint for the next Republican president, proposes abolishing the LPO entirely. Billionaires Vivek Ramaswamy and Elon Musk, who have been tasked by President Trump to lead a new task force called the Department of Government Efficiency, could also target the department in a sweeping proposal: There is sex. Cut federal programs and personnel. (Musk’s electric car company Tesla received a $465 million loan from the firm in 2010).
Other lawmakers are pushing to fund more energy sources, including nuclear and geothermal, favored by Republicans and President Trump’s nominee for energy secretary, Chris Wright, the CEO of a hydraulic fracturing company. It has been suggested that LPOs may be reformed. “If we’re going to move forward with the LPO, the LPO needs to be at full strength,” said Rep. Brett Guthrie, Republican of Kentucky. Politico’s E&E News.
DOE officials noted that local economic growth and jobs could be at risk if LPO investment is cut.
“There’s steel in the ground and jobs at new or expanded facilities across the country,” a DOE spokesperson said in a statement. “It would be irresponsible for any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities facilitated by LPO investments.”
