The US Department of Energy’s Loan Programs Office (LPO) recently announced a streamlined application process for its Title XVII programs.
Under Title XVII of the Energy Policy Act of 2005, LPO administers three separate loan programs—Renewable Energy and Efficient Energy, Advanced Fossil and Advanced Nuclear—with up to $4.5 billion, $8.5 billion and $10.9 billion, respectively, in loan guarantee authority currently available thereunder.
For the Title XVII programs, the streamlined application process includes an origination fee that, effective January 1, 2021, will now only be payable at financial close by virtue of the Energy Act of 2020. Previously, all applicants were required to “submit nonrefundable fees upon submission of Part I and Part II applications, as well as pay costs at different phases of the due diligence process.” From January 1, 2021, applicants “who reach financial close will pay an origination fee that is sufficient to cover applicable administrative expenses associated with the review and due diligence of their loan guarantee application.” The announcement stated that the origination fee will cover these costs:
Application Fee … cover[ing] costs associated with LPO’s financial and technical review of the Part I and II applications. The fee is $150,000 for projects that request a loan amount that does not exceed $150 million and $400,000 for projects that exceed $150 million.
Facility Fee … cover[ing] the underwriting process following the Part I and Part II application and is calculated as a percentage of the requested loan amount; and
Third Party Consultants Fee … reimburse[ing] LPO for the out-of-pocket costs of third-party consultants engaged by DOE during the due diligence phase, including outside legal consultants, independent engineers, market analysts and financial analysts.
In addition, LPO has streamlined the Title XVII application process and, for Part I applications, LPO’s review:
…will focus on evaluating if the Project (1) qualifies as an eligible technology under the [related] Solicitation [link added], (2) avoids, reduces, or sequesters anthropogenic emissions of greenhouse gases or air pollutants, (3) employs New or Significantly Improved Technology as compared to Commercial Technology in service in the United States (Innovative Technology), and (4) is located in the United States.
While the LPO has always required environmental compliance, a newly required input into the Part I review is “Attachment C -- Summary Lifecycle GHG Emissions Data Worksheet” of the related solicitations. LPO says that Part I applicants “should ensure [the worksheet] is filled out accurately and completely with all carbon inputs and outputs.”