Stoel Rives providing details on solicitation under the DOE loan guarantee program
Alexander Richter
14 Eki 2009
U.S. renewable energy focused law firm Stoel Rives provides details about theDOE loan gurantee program, the recent solicitation, and what it means to developers and attached lenders.
Already posted, a recent release by Renewable Energy focused law firm Stoel Rives, provides details about the program and what it means to developers and attached lenders.
“The DOE issued a solicitation for loan guarantee applications under its Financial Institution Partnership Program. The program covers renewable generation projects with a lender already attached, and which would serve as the applicant. The lender would do the majority of the due diligence, but would submit term sheets and an information memorandum to the department. Only 80% of each loan to a project would be covered by the guarantee.
The program is designed to combat the slow pace at which projects have moved through due diligence when dealing with the department directly. The department has said it will accept a broad definition of “lender”, and minimum project rating of BB/BB/Ba2 (S&P/Fitch/Moody’s). Projects will also need to comply with union and US content legislation to qualify. Wind, solar, geothermal, biomass, landfill, waste and hydro are all eligible.”
According to Stoel Rives, “this solicitation is not aimed at the borrowers or the developers — it is open to lenders only and invites them to apply for a partial, risk-sharing loan guarantee under the Department of Energy’s (“DOE”) Section 1705 Loan Guarantee Program for Commercial Technology Renewable Energy Generation Projects. This solicitation provides up to $750,000,000 of the $3.95 billion made available to support debt financing of U.S. renewable projects. The solicitation appears to be DOE’s answer to the inability of eligible borrowers to meet the cost-share requirement.
This particular solicitation will be implemented through the use of a Financial Institution Partnership Program (“FIPP” for short), a streamlined set of standards that is layered on top of (not instead of) the existing Section 1705 Program. DOE’s goal is to accelerate the loan guarantee underwriting process through FIPP and encourage the provision of private lender expertise and capital for eligible projects.”
For full details about the legal point of view, see link to the Stoel Rives article below.
Source: “Show me the money: Loan Guarantee Solicitation for Commercial Technology Applications” Stoel Rives, Emii.com
