This article was originally published 30 July, 2009

On July 29, 2009, the U.S. Department of Energy (DOE) issued two solicitations for applications pursuant to the loan guarantee program authorized by Title XVII of the Energy Policy Act of 2005 (EPAct 2005). The American Recovery and Reinvestment Act of 2009 (ARRA) appropriated approximately $6 billion to pay for the credit subsidy costs of loan guarantees for certain types of projects, as specified by a new section 1705 of the Title XVII program. The new solicitations invite applications for loan guarantees where the credit subsidy costs would be paid with these appropriated funds, and therefore these solicitations present an opportunity for developers, project sponsors and investors not previously available under the Title XVII program. One of the new solicitations seeks applications for "electric power transmission infrastructure investment projects," and the other seeks applications for "projects that employ innovative energy efficiency, renewable energy, and advanced transmission and distribution technologies." Under both solicitations, Part I application materials are due by September 14, 2009, with additional application materials being due in subsequent months.

Background

Title XVII of EPAct 2005 authorized DOE to issue loan guarantees for a variety of types of projects. In 2008, DOE issued solicitations that invited the submission of applications for loan guarantees for various types of projects including renewable energy, electric transmission, nuclear power, and clean coal projects.

As originally enacted,Title XVII of EPAct 2005 limited the Department's loan guarantee authority to projects that use new or significantly improved technologies and that avoid, reduce or sequester air pollutants or greenhouse gas emissions. In addition, at no time prior to enactment of the ARRA had Congress provided federal funds to pay the credit subsidy cost of any loan guarantees issued by DOE under the Title XVII program. Consequently, each of the 2008 solicitations provided that borrowers or project sponsors would be required to pay, at or prior to closing, the cost of the loan guarantees received from DOE.

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