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| General Loan Guarantee Program |
| 1. Is my project eligible for a DOE loan guarantee?
At this time, the Department does not consider projects for review outside
of the solicitation application process. However, to better
understand if a project is eligible for a DOE loan guarantee,
an applicant may want to review the Loan Guarantee Program's
guiding documents, including
Title XVII
of the 2005 Energy Policy Act and the
Final Rule.
Further eligibility requirements can be found in a technology specific
solicitation.
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| 2. How can I apply for a Loan Guarantee?
The Department currently invites applications by issuing technology
specific solicitations which can be found at
www.lgprogram.energy.gov/keydocs.html.
Once a solicitation is issued, project sponsors have a
defined amount of time to respond with a complete
application and fee (if required) before the solicitation
closing date. Project sponsors are encouraged to
thoroughly review the solicitation, its requirements
and deadlines before deciding to apply. Methods for
transmitting complete applications to the Department
can be found in the specific solicitation. Applications
submitted outside the solicitation process will not be
reviewed by the Department.
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| 3. What are the long lead time items that an
applicant should focus on in preparing their application?
Several detailed, long lead time reports must be submitted
with the application. In most cases, the applicant must
provide a preliminary credit assessment for the project,
if the project is proposed as a project finance structure
or the borrower's most recent corporate credit rating if
the project is proposed as a corporate finance structure,
in each case, without assuming a potential DOE loan
guarantee, and from a nationally recognized rating
agency. A credit rating agency would need about six
weeks to prepare the report. In addition, the applicant
should prepare an environmental report for the project's
site and an engineering report, prepared by an
independent engineer, for the proposed project. These
activities could take 8 to 12 weeks.
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| 4. How do I determine if my project
is ready for commercialization?
As a general rule, the Loan Guarantee Office
would like applicants to provide a minimum of
1,000 to 2,000 hours of operating data usually
from a demonstration scale project employing
the same technology proposed in the application.
The demonstrated yield and throughput results
must be supportive of the project's pro forma
assumptions for the proposed commercial facility
allowing the Department to gain reasonable
assurance of loan repayment and technological
efficacy. It is in the applicant's best interest
to make a compelling case that their project is
ready for full scale commercialization.
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| 5. What is credit subsidy?
Credit Subsidy is the net present value of the
estimated long-term cost to the U.S. government of
the loan guaranteed as determined under the applicable
provisions of the Federal Credit Reform Act of 1990,
as amended ("FCRA").
Section 1702(b) of Title XVII provides that DOE
must receive either an appropriation for the Credit
Subsidy Cost of a loan guarantee or, in lieu of an
appropriation, a cash payment of such cost directly
from the applicant.
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| 6. What qualifies as a commercial
technology?
A Commercial Technology means a technology in
general use in the commercial marketplace in the
United States at the time the Term Sheet is issued
by DOE setting forth the key terms of a proposed
investment. A technology is in general use if it
has been installed in and is being used in three
or more commercial projects in the United States
in the same general application as in the proposed
project, and has been in operation in each such
commercial project for a period of at least five
years by the time the Term Sheet is issued.
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| 7. If my proposed project requires
less than a $25 million loan would it be
cost-effective to participate in DOE's Loan
Guarantee Program given the amount of the
fees?
Unfortunately, there are no special provisions
for small business participation at this time.
By carefully reviewing the specific solicitation,
an estimate of total costs can be arrived at given
the size of the loan request. This estimate will
likely determine whether the financial cost of
applying to the program is economical for proposed
project.
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| 8. How did the American Recovery and Reinvestment
Act of 2009 (the "Recovery Act") amend the Department
of Energy's (DOE) Loan Guarantee Program and how much
was provided in appropriated funds?
The Recovery Act created Section 1705 under
Title XVII of the Energy Policy Act of 2005,
authorizing a new program for rapid deployment
of renewable energy systems, electric power
transmission and leading edge biofuels projects.
Approximately $3,965,000,000 in appropriated
funds has been made available under the Recovery
Act to pay the Credit Subsidy Costs of loan
guarantees for such projects.
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| 9. Is Recovery Act Funding subject to
the Requirements of Title XVII of EPAct?
The Section 1705 Program is subject to all of the
requirements of Title XVII, including Section 1702,
which has specific requirements related to DOE's
position as a senior secured lender, but excluding
Section 1703.
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| 10. May an Applicant or Lender-Applicant
file more than one Application under the Section
1705 Program?
Under the solicitations for Electric Power
Transmission Infrastructure Investment Projects
(which is now closed to Part I submissions), No.
DE-FOA-0000132, and for Commercial Technology
Renewable Energy Generation Projects under the
Financial Institution Partnership Program, No.
DE-FOA-0000166 - both of which are solicitations
for projects using Commercial Technology -- more
than one Application may be submitted by an Applicant
or a Lender-Applicant under the respective solicitations.
However, under the solicitation for Projects that
Employ Innovative Energy Efficiency, Renewable
Energy, and Advanced Transmission and Distribution
Technologies, DE-FOA-0000140 (the "Innovative
Solicitation"), an Applicant may only submit one
Application for one project employing a particular
technology, consistent with Section 609.3(a) of 10
CFR Part 609. That is, an Applicant under the
Innovative Solicitation may not submit an Application(s)
for multiple projects using the same technology but
may submit separate Applications for projects using
different technologies.
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