President Barack Obama on August 24 announced an additional $1 billion of loan guarantees aailable for distributed clean energy projects, to be divided equally between advanced fossil energy (AFE) and renewable energy and efficient energy (REEE) projects.

Howard Shafferman, Partner and Practice Leader for Ballard Spahr’s Energy and Project Finance Group, noted that these new loan guarantees will be best suited for large projects due to the high transaction fees such as a $50,000 application fee, followed by other substantial fees at the next stage of the process.

“It will be interesting to see if this announcement attracts distributed energy projects that are large – large enough so that transaction costs aren’t a barrier,” he said. “Pursuing loan guarantees for smaller ones just wouldn’t make any sense.”

These new loan guarantees and other actions taken by the president during his time in office indicate he is dedicated to bolstering the country’s power industry.

“All of these projects will encourage distributed energy, in which utilities have not participated in significantly so far,” he said. “It’s clear the administration is supportive of that distributed model as well as other approaches that can encourage provision of clean electricity.”

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