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DOE Loan Programs Office
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IN THIS ISSUE:
...and more updates below from the U.S. DOE Loan Programs Office!
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 The U.S. Department of Energy's (DOE) Loan Programs Office (LPO) continues its responsible stewardship of the taxpayer dollar while building a clean energy economy that works for all. We made some big first-of-a-kind announcements in the second quarter – evidence that with our financing support, American companies want to and can do big things across a diverse set of clean technologies. I share some highlights from the summer so far below.
Portfolio Projects
The diversity of technologies LPO announced closings for in the past three months was broader than ever:
- In May, we saw LPO’s first support for sustainable chemical manufacturing in our conditional commitment to Bioforge Marshall for up to a $213.6 million loan guarantee.
- In June, we followed that with a conditional commitment to Plug Power for up $1.66 billion to support wide deployment of electrolyzer-based clean hydrogen production, distinct from the production method in LPO’s first project announcement when we “reopened for business” in 2021.
- And in July, we announced conditional commitments for the battery component supply chain in Indiana (to Entek Lithium Separators, up to $1.2 billion), utility-scale renewables deployment in Puerto Rico (to AES Corporation; up to $861.3 million) and, just days ago, a novel plastics recycling facility with a clean byproduct for steelmaking (to IRG Erie, up to $182.6 million). You can read more about each of these exciting projects in this newsletter.
Liftoff Activities
At the end of April, we launched DOE’s Offshore Wind Liftoff report, the ninth and latest technology covered in the Pathways to Commercial Liftoff series. As we continue updating our previous reports, we’ve also begun hosting regional Deploy Dialogues in order to validate the private sector perspectives in select reports with those who are seeing the commercial outlook of these technologies evolve firsthand. In partnership with DOE’s Office of Fossil Energy and Carbon Management, we opened the door to the public to join us for our first regional Dialogue on Critical Materials in Morgantown, West Virginia, on July 17.
Latest Application Activity
LPO's most recent Monthly Application Activity Report shows an interest in private sector-led, government-enabled project financing with no sign of slowing. As of June 30, 2024, LPO has 214 active applications requesting more than $285 billion in financing for proposed projects in nearly all fifty states, D.C., and Puerto Rico. This is an important reminder that projects exit the pipeline when we make a new announcement, which means interest in LPO financing is growing at a rate quicker than one might first think when comparing the data month-to-month.
With just weeks until the second anniversary of the Inflation Reduction Act passing, I’d like again to express my gratitude to all of you supporting LPO’s mission over the past two years. We still have plenty of work ahead of us; but if the pace and size of LPO’s announcements are any indication, the clean energy economy is taking clear shape.
Warmly,
 LPO Director Jigar Shah
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Only July 9th, LPO announced a conditional commitment of up to $1.2 billion for a direct loan to ENTEK Lithium Separators LLC (ENTEK) to substantially finance a new facility in Terre Haute, Indiana to manufacture lithium-ion battery separators. The separators will be used primarily in electric vehicles (EVs)—strengthening the U.S. lithium-ion battery cells supply chain and enabling the creation of batteries used in advanced technology vehicles. Based on current battery form factors chosen by cell manufacturers, the project will support roughly 1.9 million mid-size EVs or 1.3 million eSUVs.
As with all conditional commitments that LPO offers, the expected DOE loan will only be issued pending the satisfaction of certain conditions, including final legal, contractual, technical, and financial requirements that the conditional commitment specifies.
Read the full ENTEK conditional commitment blog for more details.
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On July 18th, LPO announced a conditional commitment for a loan guarantee of up to $861.3 million to Clean Flexible Energy, LLC to finance the construction of two solar photovoltaic (PV) farms equipped with battery storage and two standalone battery energy storage systems (BESS) in Puerto Rico. The facilities will be located in the municipalities of Guayama (Jobos) and Salinas and will help deliver clean, reliable, and affordable power throughout Puerto Rico.
Project Marahu will play an integral role in improving Puerto Rico’s energy resilience and affordability while helping Puerto Rico meet its ambitious clean energy and climate goals. Annually, the solar PV installations will produce approximately 460,000 MWh of energy, enough to power approximately 43,000 homes, and enhance Puerto Rico’s grid reliability and energy security. The co-location of the new solar and battery resources will help maximize the project’s energy production and improve grid stability. Battery storage will allow the project to continue to provide energy to residents even during adverse weather conditions.
Read the full Project Marahu conditional commitment blog for more details.
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On July 23rd, LPO announced a conditional commitment for a loan guarantee of up to $182.6 million to IRG Erie, Inc. (IRG Erie) to finance the construction of a plastics recycling facility in Erie, Pennsylvania, and an injection system tower at a steel manufacturing facility in northwest Indiana.
IRG Erie will be the first company in the United States to produce and sell its plastic-waste-based, iron-reducing agent CleanRed™ to domestic steel manufacturers, helping to solidify America’s position as the global leader in low-carbon iron and steel products. CleanRed™ can reduce greenhouse gas (GHG) emissions in the steelmaking process by replacing a portion of coking coal used in blast furnaces or anthracite coal used in electric arc furnaces. The recycling plant will also convert approximately 160,000 tons per year of post-consumer waste plastic into approximately 100,000 tons per year of recycled plastic materials that will be used to replace virgin plastics.
Read the full IRG Erie conditional commitment blog for more details.
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LPO "Tech Talks" is a blog series that dives deep into the major clean energy, manufacturing, and advanced transportation technology sectors that may be eligible for project financing through LPO loan programs.
This month, we're looking at an earlier LPO Tech Talk focused on renewable fuels and chemicals which—because of recent conditional commitment announcements like Bioforge and IRG Erie—are emerging as key tools for achieving a net-zero economy by 2050. As Michael Reed, LPO’s Director of the Technical and Environmental Division, explains, “Many goods and industrial materials used today, including fuels and plastics, are produced using petroleum feedstocks. By replacing these fossil fuel-based feedstocks with renewable alternatives—such as agricultural crops; fats, oils, and greases; tree waste; construction waste; and agricultural waste—manufacturers can make comparable end products that are lower carbon, carbon neutral, or even carbon negative.”
Read the full Tech Talk on Renewable Fuels & Chemicals to learn more about how LPO can finance manufacturing and deployment of clean fuels and products to facilitate the transition to a clean energy economy.
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LPO’s Energy Infrastructure Reinvestment (EIR) loan authority can help utilities achieve their capital transition plans while reducing costs to customers. To access this financing opportunity, utilities must apply according to LPO’s Title 17 loan application process and meet all relevant criteria. This blog describes some features of LPO’s loan evaluation process and key factors that can support an expedient application process between LPO and utilities.
With the authorization of EIR and given its broad definition of energy infrastructure and resulting eligible project types, LPO is seeing utility applications that include projects with a variety of technologies, locations, and timeframes. These applicants are often seeking debt financing at the operating company level. LPO financing for regulated utilities seeking to deploy established technologies has different features to consider than our historical lending practices, including the possibility for more standardized loan approval processes than for unique, first-of-a-kind projects with new technologies and inherent commercial or technology risk.
The remainder of the blog provides tips and focused recommendations to help facilitate a more streamlined application process for utility applicants, including additional guidance for utilities on Part I applications.
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The Energy Act of 2020 and the Inflation Reduction Act (IRA) of 2022 directed LPO to engage in outreach activities through conferences and online programs to disseminate information about its programs. Below is an overview of recent and major upcoming events.
Recent Events
LPO's Director of Outreach and Business Development, Phil Kangas, joined several DOE colleagues on a panel at the SelectUSA Investment Summit on June 26. LPO State Energy Financing Institution (SEFI) team members also attended the Summit, connecting with many state economic development organizations that were attending to attract foreign direct investments.
 Major Upcoming Events
Texas Economic Development Council Webinar: The Inflation Reduction Act: Taking Advantage of Historic Federal Funding Opportunities • 31 Jul 2024 • Webinar
In this webinar, LPO Senior Consultant Tom Hucker will describe the hundreds of billions of dollars in financing available from the LPO office for energy-related projects including renewable energy, battery storage, hydrogen, nuclear, building renovation, EV charging, biofuels, critical minerals & mining, and more. Join us for this informative webinar presentation to learn how to access funds for energy-related projects in Texas to support your economic development efforts.
FECM / NETL Carbon Management Research Project Review Meeting • 5-9 Aug 2024 • Pittsburgh, PA
LPO staff will be attending this meeting in Pittsburgh to engage with prospective applicants for carbon management and CIFIA projects
RE+ • 9-12 Sep 2024 • Anaheim, CA
LPO Director Jigar Shah will be participating in the master speaker series to discuss virtual power plants and loan growth. Senior Advisor Liz Perera will participate on a panel Positive Impact in Clean Energy Development through Community Benefits Agreements & Successful Community Engagement. LPO will also be participating in programming around Tribal energy projects. Stay tuned for more information about LPO’s participation.
Forth Roadmap Conference • 24-26 Sep 2024 • Detroit, MI
LPO Advanced Transportation Financing team will be participating at the Roadmap Conference in Detroit, MI. Stay tuned for more information about LPO’s participation.
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