On July 29, 2009, the U.S. Department of Energy (DOE) announced two long-awaited solicitations for applications for loan guarantees, which are being funded through the American Recovery and Reinvestment Act of 2009 (ARRA) and through separate 2009 appropriations. The first solicitation invites applications for loan guarantees to support projects utilizing new or significantly improved technology for energy efficiency, renewable energy, biofuels, and advanced electricity transmission/distribution, including "rapid deployment" projects, i.e., those that can commence construction no later than September 30, 2011. The second solicitation invites applications for loan guarantees to support significant "rapid deployment" electric power transmission projects utilizing commercial technology. The solicitations for ARRA loan guarantees of commercial (non-innovative) renewable energy projects have not yet been issued by the DOE.

Under the first solicitation, the DOE will make available up to $8.5 billion in loan guarantee authority for innovative energy efficiency, renewable energy, and advanced transmission and distribution technologies. The DOE also will provide up to $2.5 billion (of which $500 million is reserved for leading-edge biofuels projects) to pay the credit subsidy costs of loan guarantees made available under this solicitation for innovative renewable energy, electric transmission, and leading-edge biofuels projects that can be deployed rapidly. The DOE will accept applications for this first solicitation on a rolling basis in seven rounds. For the first round, Part I of the two-part application is due September 14, 2009. Part II is due November 13, 2009. The DOE states that entities applying in earlier rounds will enjoy a "first movers" advantage in terms of order or priority of review. 

Under the second solicitation, the DOE will make available up to $750 million to pay the credit subsidy costs of loan guarantees made available under this solicitation for significant electric transmission infrastructure projects. The DOE has established a single deadline (September 14, 2009) for Part I of the two-part application. Part II is due (at the applicant's option) on October 26, 2009, December 10, 2009, or January 25, 2010. Applications must be updated every 90 days.

The DOE expects that these solicitations will support up to $30 billion in loan guarantees (depending on the applications and market conditions) for renewable energy projects, plus several billion dollars more in loan guarantees for large transmission projects. 

The two solicitations are the sixth and seventh solicitations issued by the DOE under the Title XVII Loan Guarantee Program but constitute the first opportunity to obtain loan guarantees for rapid deployment projects under ARRA. The DOE will undertake detailed reviews (including post-selection due diligence reviews) for projects that are the subject of loan guarantee applications.

The solicitations are available at http://www.lgprogram.energy.gov/2009-ren-energy-sol.pdf and http://www.lgprogram.energy.gov/2009-CPLX-TRANS-sol.pdf. Ballard Spahr plans to issue a more detailed analysis of the solicitations in the near future. 

Contact Information

If you have questions about the procedures or application process for the loan guarantees or need assistance in completing an application, please feel free to contact Howard H. Shafferman (hhs@ballardspahr.com; 202.661.2205) or Patrick R. Gillard (gillard@ballardspahr.com; 215.864.8536).

 

 


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