U.S. Secretary Steven Chu announced the release of up to $30 billion in loan guarantees for renewable energy and transmission projects. The loan guarantees aim to accelerate renewable project development. In addition to this announcement, two new loan guarantee solicitations, financed via the American Recovery and Reinvestment Act of 2009 (“the Act”), were released that provide information regarding the application process and eligibility for the “innovative” technology projects loan guarantee program (Section 1703) and the newly created proven technology projects program (Section 1705).
Section 1703. The solicitation relating to loan guarantees issued under Section 1703 applies to projects in the United States that employ innovative energy efficiency, renewable energy and advanced transmission and distribution technologies that constitute new or significantly improved technologies as defined by the Federal Regulations. The loan guarantees are intended to facilitate accelerated commercialization of these energy projects. Under this solicitation, the Department of Energy (“DOE”) has made up to $8.5 billion in loan guarantee authority available. The solicitation will remain open until this amount is fully obligated, and the first application is due September 14, 2009. A copy of the full solicitation is available at: http://www.lgprogram.energy.gov/2009-ren-energy-sol.pdf
Section 1705. The solicitation relating to loan guarantees issued under Section 1705 supports transmission infrastructure investment projects located in the United States that are the most assured of commencing construction, and hence having a loan guarantee issued, no later than September 30, 2011. Proposed projects under Section 1705 are not required to meet the innovative technology standards of Section 1703, but they must aid the economic conditions of the nation by assisting with the creation and preservation of jobs, infrastructure investment and facilitation of energy efficiency. The solicitation notes that nearly $6 billion is authorized under the Act to pay the Credit Subsidy Costs of loan guarantees issued under Section 1705. Of this amount DOE will make available up to $750 million, under this solicitation, to pay the Credit Subsidy Costs of loan guarantees made for Transmission Infrastructure Investment Projects. The authority to enter into guarantees under Section 1705 will expire on September 30, 2011. The first application is due September 14, 2009. A copy of the full solicitation is available at: http://www.lgprogram.energy.gov/2009-CPLX-TRANS-sol.pdf. Although this solicitation is limited to transmission infrastructure investment projects, DOE anticipates issuing additional solicitations in the future to provide an opportunity for the submission of additional loan guarantee applications in support of electric power transmission systems projects.
A copy of the full release is available at: Obama Administration Announces Billions in Lending Authority for Renewable Energy Projects and to Modernize the Grid.
The Michael Best Stimulus and Economic Recovery Team is prepared to assist you in understanding the implications and in developing and implementing a strategy to secure the benefits of this legislation.