Interview with Jigar Shah, Director, Loans Program Office, U.S. Department of Energy
Leyline Renewable Capital interviewed Jigar Shah, director of the Loan Programs Office at the U.S. Department of Energy (DOE), to find out more about the DOE loan program and how the program interacts with the type of lending that Leyline provides.
What are the general requirements for the DOE loan program (e.g., experience, capital needs) for first-of-a-kind projects? Is there any geography/technology that you are particularly focused on?
The Loan Programs Office (LPO) is focused precisely on projects and other high-impact, energy-related ventures with a need for debt capital, where private lenders don't have the technical expertise to lend to. One of the other benefits of LPO is that we can provide a large amount of debt; our debt sizes have ranged from $43 million to above $1 billion. Projects can be located anywhere in the United States or its territories.
Through its Title 17 Innovative Energy Loan Guarantee Program, LPO can guarantee commercial debt or offer debt directly from the U.S. Treasury's Federal Finance Bank for projects that deploy innovative technology and avoid, reduce, or sequester greenhouse gases or air pollutants. As long as the project meets all eligibility requirements, LPO can consider any technology in the renewable energy/efficient energy, advanced nuclear energy, and advanced fossil energy sectors. More than $23 billion is available across those sectors, and technologies of particular interest include transmission; offshore wind; green hydrogen; advanced geothermal; cleaner fuels; small modular nuclear reactors; and carbon capture, utilization, and storage.
LPO also administers the Advanced Technology Vehicles Manufacturing (ATVM) loan program, which provides debt capital for projects that manufacture more fuel-efficient light-duty or ultra-efficient vehicles, as well as projects that manufacture components along the auto supply chain that contribute to fuel efficiency. While the Innovative Energy loan program focuses on access to debt capital, ATVM focuses on the availability of affordable debt capital to encourage auto manufacturing in the United States, and has $17.7 billion available.
LPO's final loan program focuses on technologies that are already commercially deployed, but facilitates access to debt capital for Native-American tribes or tribal energy development organizations. The Tribal Energy Loan Guarantee Program has $2 billion available in partial loan guarantees for commercial lenders to provide debt to tribal energy projects.
Leyline Renewable Capital provides development-stage capital for promising renewable energy ventures, so how is your loan program different? Or more generally, how do you see your program interacting with loan programs like what Leyline provides?
LPO depends on groups like Leyline to provide the financing for these types of projects. Our focus is on the debt side of the equation. In general, if there are rational project equity investors in the clean energy space, the LPO can provide debt to projects.
LPO builds a bridge to bankability for such projects. Whereas most commercial lenders would typically want to analyze technologies that have a commercial operating history, LPO uniquely has the in-house engineering expertise to review technologies that may have only demonstration or pilot-scale operating history. LPO-financed projects that are able to prove commercial operating success and bankability can then attract the private debt capital needed for wide-scale commercial deployment.
What is the best way for companies who are interested in your loan program to get in touch with you? What kind of assistance do you provide to companies that may have never had any kind of lending experience with the federal government?
We encourage companies to engage with LPO staff directly in pre-application consultations to learn more about eligibility requirements and our process. We're also happy to engage early with potential borrowers, so that they have a better understanding about when is the right time to be actively engaged with LPO. While much of the transaction process is similar to working with any lender, we have a team that can help potential borrowers as they start and move through the loan application process. The best way to reach us is to email LPO@hq.doe.gov.
How do you see the entire range of DOE grants/lending across the entire value chain? (e.g., description of ARPA-E [Advanced Research Projects Agency-Energy] at early stage, through applied technologies, and R&D through to end of pipeline commercialization)?
DOE very much supports the entire technology development cycle. Funding can go toward improving and deploying existing, market-ready energy solutions - such as DOE's goals to cut the cost of utility-scale solar electricity in half yet again, and to add 30 gigawatts of offshore wind capacity by 2030. But at the same time, DOE is supporting projects that can help us unlock game-changing breakthroughs, like our new Energy Earthshots Initiative.