In an eagerly anticipated announcement, the U.S. Department of Energy ("DOE") yesterday released two solicitations from its Loan Guarantee Program that will provide up to $30 billion in loan guarantees for renewable energy projects and $750 million in loan guarantees for projects that increase the reliability and efficiency of the nation’s energy transmission system. The solicitations continue the existing §1703 Program financing new and innovative renewable energy projects, while also implementing the new §1705 Program that will fund conventional renewable energy generation, manufacturing and transmission projects which begin construction before October 2011. These guarantees – which can back the debt of a project up to 80% of the total project cost – will allow recipient companies much easier access to capital.
Applicants for these loan guarantees must submit "Part 1" applications providing a summary level description of the project and financing sources by September 14, 2009. A more detailed "Part 2" application will be due October 26, 2009, for transmission projects and on November 13, 2009, for all other eligible projects. In considering responses to these solicitations, DOE will attempt to streamline its approval process to accelerate the issuance of loan guarantees. DOE has also stated that it will consider a variety of financing structures as eligible for backing by a loan guarantee.
The released solicitations and the accompany regulations are complex and project eligibility for either the existing Program or the new § 1705 Program need to be carefully weighed and considered. Brownstein Hyatt Farber Schreck is a national leader in assisting companies in obtaining grants and loan guaranties under the 2009 American Recovery and Reinvestment Act. If you have any questions about your company's eligibility, or any other question regarding the federal grant or loan guarantee programs, please contact John Herrick (303-223-1122), Mark Mathews (303-223-1179) or Michelle Kales (303-223-1196).
Additional details about these solicitations will be included in our next FOREcast newsletter, which will be distributed soon.