Introducing The U.S. Department Of Energy's Tribal Energy Loan Guarantee Program

Author:Mr Stephen R. Bolotin and Taite R. McDonald
Profession:Holland & Knight

Stephen Bolotin is Public Affairs Advisor and Taite McDonald is a Partner in the Washington D.C. office

The U.S. Department of Energy (DOE) is creating a new loan guarantee program that will offer attractive financing to American Indian tribes for energy development projects. While the Tribal Energy Loan Guarantee Program (Tribal Energy LGP) is authorized under the Energy Policy Act of 2005 to issue guarantees for eligible projects totaling in aggregate up to $2 billion, the program was only recently funded under the Fiscal Year 2017 Omnibus Spending Bill. Since the beginning of 2018, DOE has been actively engaging tribal stakeholders as it optimizes and finalizes the details of the program. Given the relative lack of restrictions on technologies or project locations, the Tribal Energy LGP promises to benefit a wide range of projects, including electric generation, transmission or energy storage projects; district heating and cool projects; and projects that entail drilling, mining, refining and/or the production of biofuels or chemicals. The official solicitation is slated for release in just a couple of weeks.

The Tribal Energy LGP is being stood up by the DOE's Loan Programs Office (LPO)—which currently runs both the Advanced Technology Vehicle Manufacturing Program (ATVM) and the Title XVII Program for Innovative Energy Technologies—in consultation with the Office of Indian Energy Policy and Programs (IE). Unlike the ATVM and Title XVII programs, however, the Tribal Energy LGP would be a partnership between eligible lenders and DOE, where the lender as a commercial bank or other non-federal lender with suitable experience and capabilities would partially guarantee repayment of loan to an Indian tribe made under this program. More specifically, a tribe seeking financing would apply to an eligible lender, which in turn would apply to DOE for the partial guarantee. Eligible borrowers include American Indian tribes, Alaskan Native villages and related regional or village entities. Importantly, the Tribal Energy LGP will allow energy development projects to be partially owned by non-tribal participants.

While many details will only be clarified with the official solicitation release, it appears that there may be a small appetite for some technology risk within the Tribal Energy LGP, when...

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