On the very last business day for the Biden administration, the Department of Energy’s Loan Programs Office finalized three loans — including a massive $15 billion loan to PG&E — and made four new conditional commitments.
The office started 2021 with a $400 billion loan authority, thanks in part to funding from the Inflation Reduction Act.
During the last four years LPO received applications for around $279 billion of that funding, fielding more than 180 applications that spanned both the country and the various programs over which the office’s loan authority is spread.
Today’s loans bring the office’s track record under Biden to 53 deals, totalling around $107.58 billion in project investments; just over a quarter of their total authority.
As director Jigar Shah put it in his LinkedIn post outlining the office’s achievements, “today, the Loan Programs Office is closing loans at a rate that makes us the largest energy credit fund in the World.”
More than $60 billion of the loans offered under Shah’s tenure have now been finalized. That includes 25 individual projects, 14 of which were wrapped up in just the last year, as borrowers ramped up their pace in an attempt to get their funding in under the wire of a new administration.
The office’s entire project portfolio — including loans finalized before the Biden administration took office — includes nearly $100 billion in closed loans. Those projects, largely funded during the Obama and Biden administrations, include projects that aim to construct nuclear plants, manufacture battery components, and install next-generation transmission towers.
But despite an uptick in the sense of urgency from applicants post-election, as the Biden administration exits, LPO’s pipeline of applications that have yet to reach the conditional commitment stage remains massive. As of today, the office reports that there are over 160 applications outstanding, seeking more than $200 billion.
LPO’s final loans
The very last deals announced before many in the Loan Programs Office depart include the closing of a $15 billion loan to Pacific Gas and Electric to help the utility build out a portfolio of projects including hydropower, battery storage, virtual power plants, and transmission upgrades including reconductoring and grid enhancing technologies.
The loan is the first to be finalized under the Energy Infrastructure Reinvestment funding, which is designated specifically for regulated, investment-grade utilities. PG&E first applied for funding in June 2023, and only received a conditional commitment in December.
(That appears to be near record timing for finalizing a loan. CelLink’s $362 million loan, for example, took nearly a year to finalize, after receiving a conditional commitment in May 2023.)
Equally speedy was a $584.5 million loan to Convergent Energy to build solar and storage projects in Puerto Rico. Convergent also received a conditional commitment in December, and finalized its loan today. The office also finalized a $996 million loan to Ioneer Rhyolite Ridge, to finance the processing of lithium carbonate to support the domestic electric vehicle supply chain.
Conditional commitments announced today went to Pattern Energy and Infinigen, to build renewables and storage projects in Puerto Rico; to Zum Energy, to deploy electric school buses and the requisite software and infrastructure to enable virtual power plants; and finally to Michigan Potash, to produce fertilizer for agricultural production.
