Green business, green careers and job training
Solutions that build smart communities with green careers and sustainable businesses!
HOME
EDITOR'S BLOG
FEATURE ARTICLES
GET STARTED

Save on Career Education through Lorman Education

Our readers are offered a discount on Lorman seminars and courses. Check out their business, management and legal offers at this link to qualify for our discounts. They also offer green business training opportunities. Please visit http://www.lorman.com/training/CaliforniaGreenSolutions for a complete listing of courses. Register online or call Lorman at 866-352-9539.
Home > Feature Articles > Alternative Energy Solutions

DOE Loan Guarantees through FIPP

DOE provides loan guarantee funding for renewable energy projects.

Find green business solutions
In late 2009, the DOE developed a program that will allow approved commercial lenders to lead the renewable energy loan application, diligence and documentation, which should expedite the process for obtaining DOE-backed financing.

Under EPACT, the project must include at least 20 percent equity; under the solicitation, the DOE loan guarantee cannot exceed 80 percent of the total debt financing. Thus, up to 64 percent of a project’s total cost can be guaranteed by the federal government. This mechanism should simplify and expedite the loan guarantee process for projects that can meet minimum credit rating requirements and that can begin construction by September 30, 2011. In addition, transaction costs, including loan guarantee fees and DOE counsel and consultants costs, will be reduced under FIPP.

Loan guarantees for renewable energy projects that use commercial technologies. Eligible Commercial Renewable Generation Categories include: Wind, Open and closed loop biomass, Geothermal, Landfill gas, Waste-to-energy, Hydropower, and Solar.

Financial Institutions Partnership Program (FIPP)

FIPP provides significant flexibility to lenders and should assist borrowers in obtaining long-term financing for commercial wind, solar and other renewable energy generation projects.

Key eligibility requirements in order to qualify for FIPP:

  • Commercial technology is used
  • Projects must achieve a credit rating equivalent to BB from S&P or Fitch or Ba2 from Moody's, as evaluated without the benefit of the guarantee;
  • Projects must commence construction on or before September 30, 2011;
  • Projects must be located in, and create or retain jobs in, the U.S. or its territories or possessions;
  • Borrowers must pay all laborers and mechanics employed for the project prevailing wages, as determined under the Davis-Bacon Act; and
  • The borrower or other principals must make a "significant" equity investment in the project.
  • DOE loan guaranteed projects are subject to the National Environmental Policy Act, which generally requires an Environmental Assessment to determine the likelihood of a significant environmental impact.

DOE's Loan Guarantee Programs

Title XVII of the Energy Policy Act of 2005: Section 1703 Program

Title XVII established DOE's innovative technologies loan guarantee program (the Section 1703 Program), which was designed to support projects that are unable to obtain conventional private sector financing due to technology risks.

Only projects in the U.S. that reduce greenhouse gases and employ new or significantly improved technology are eligible for the Section 1703 Program.

ARRA Recovery Act: Section 1705 Program

The Recovery Act broadened the section 1703 program by adding Section 1705 (the Section 1705 Program) to the Energy Policy Act, creating a temporary loan guarantee program for renewable energy, transmission and advanced biofuels projects in the U.S. that commence construction by September 30, 2011. The Section 1705 Program supports projects that are unable to obtain private loans due to the credit crisis, including projects that do not employ innovative technology.

One of the most significant features of the Section 1705 Program is that “Credit Subsidy Costs” are funded by the government. This Cost is the amount that DOE is required to hold on reserve to cover estimated potential losses in accordance with the Federal Credit Reform Act of 1990.

Finding Loan Providers

Lenders may be domestic or foreign commercial banks, insurance companies or other entities in the business of lending money that, among other things, have experience in originating or servicing loans for similar projects and are not disbarred or suspended from participation in federal government contracts. Lender-Applicants (or "Lead Lenders") must also demonstrate experience as the lead lender or underwriter in similar projects.

"Assuming a significant number of investment-grade projects, the $750 million of funds appropriated in respect of the FIPP Solicitation to pay Credit Subsidy Costs is estimated to support approximately $15 to $18 billion in guaranteed debt—a much higher figure than earlier published estimates," according to Nixon Peabody, a law firm that provides diverse services to companies and organizations of all sizes, including emerging companies in cleantech.

Lender-Applicants will be required to certify that the transaction would receive internal credit approval using standard internal credit policies if it were not partially guaranteed. Lenders will be expected to:

  1. Evaluate the financing plan
  2. Assess financial viability
  3. Determine technical efficacy
  4. Review project legal structure
  5. Evaluate project risks
  6. Perform financial model review
  7. Assess strengths and weaknesses of project sponsors
  8. Analyze proposed collateral
DOE also stated that it will issue an additional FIPP solicitation for loan guarantees in support of commercial renewable manufacturing projects, which are also eligible for credit subsidy costs under ARRA.

Applications will be submitted by qualified lenders on behalf of project borrowers—a dramatic change in procedure from earlier solicitations.

RESOURCE:
DOE Office of Loan Guarantee Programs

RenewableEnergyWorld.com

To track how DOE Recovery Funds are being allocated by program and by state, check out the DOE website.



Edited by Carolyn Allen, owner/editor of California Green Solutions
Green Solution Providers
Green companies directory
Submit
your green solutions - business, nonprofit, government program.
It's free.
| renewable energy | doe | doe loan | doe loan guarantee |

Share in Social Media

Sign Up For News & Information
Subscribe to our free solutions newsletter
BONUS DOWNLOAD (PDF)
"Ten+ Tips for Greening Your Office"

SUBSCRIBE HERE
Read prior issues: California GreenLines

Search For Green Solutions

Custom Search
Green Career Center
Green Job Wizard
Career Certifications Directory

green job training certifications
Green Biz Center
Solutions For Green
Directory of Green Companies

Solutions for Alternative Energy

rose in natural systems
Green Living Center
Solutions for Green: Consumers

Solutions for Remodeling

Backyard Nature Center

INSTANT GREEN POLL

"Knowing is not enough; we must apply. Willing is not enough; we must do." Goethe
RECENT ARTICLES
SITE NAVIGATION
ABOUT US

Related Articles

Johnson Controls’ fifth annual Energy Efficiency Indicator survey

Algae Industry Update from Scripps

Energy Generation Uses
Natural Resources | Water


Related Green Resources

Marcom Tips
Interactive & Video Tips

Career Resources

We encourage lifelong learning to support sustainable communities and provide these select resources to help you pursue green and sustainable self-development:

Lorman Business Training Directory of On-line Business and Compliance Classes

Green Job Wizard Job and Career Certifications Directory

Job & Career Resources

Governance
Management
Manufacturing
Operations
Facilities
Transportation
Finance
Sales & Marketing
Human Resources

Green Economy

Business Sectors
Natural Resources

Solutions For Green

About Us ~ Privacy Policy
Contact Us ~ Home

Text Link Ads

AD: Place your link here

ABOUT CALIFORNIA GREEN SOLUTIONS

We help you green your career, workplace and community by connecting you to quality green, sustainable and high performance resources. California Green Solutions focuses attention on effective solutions that sustain our natural systems. You can support our editorial work by supporting our advertisers and spreading the word about best practices and green solutions.
California Green Solutions is a publication of Carolyn Allen ~ Copyright ©2006-2030 Carolyn Allen

B2B | Job Certifications | Alternative Energy | Events | Green Directory | LED Lights | Remodeling |
CONSUMERS | Backyard Nature | Senior Health | MultiMedia Marketing | Marketing | Networking Events | Japan |