DOE Announces $750 Million Funding For Conventional Renewable Energy Generation Projects

Author:Mr John Hammond and Gregory K. Lawrence
Profession:McDermott Will & Emery

Loan guarantee solicitation is first for commercial renewable projects under the much anticipated Financial Institution Partnership Program.

The U.S. Department of Energy (DOE) announced on October 7, 2009, the first solicitation for conventional renewable energy generation projects under a new Financial Institution Partnership Program (FIPP) with private sector lender participants, to provide a streamlined set of standards designed to expedite DOE's loan guarantee underwriting process and leverage private sector expertise and capital for the efficient and prudent funding of eligible projects. The solicitation provides for up to $750 million in funding from the American Recovery and Reinvestment Act to cover the cost of loan guarantees, which DOE anticipates could support as much as $4 to 8 billion in lending to eligible projects.

This first solicitation under the new program seeks loan guarantee applications for conventional renewable energy generation projects, such as wind, solar, biomass, geothermal and hydropower. Past solicitations for renewable energy generation projects have focused on loan guarantee applications using new or innovative technologies not in general use in the marketplace. A non-exclusive list of potentially types of eligible projects under the new solicitation includes the following:

Wind facility Closed-loop biomass Open-loop biomass Geothermal facility Landfill gas facility Trash-to-energy facility Hydropower facility Solar facility The size of the of the initial funding announced by DOE may be limited as a result of the re-allocation of $2 billion from original $6 billion allocated under the loan guarantee program to the "cash-for-clunkers" program, which Congress has yet to replenish.

Under the first FIPP solicitation, proposed borrowers and project sponsors do not apply directly to DOE as in prior loan guarantee solicitations, but instead work with financial institutions satisfying the...

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