Looking Back at One Year of Application Trends for LPO Financing Programs

Just over a year ago, the DOE Loan Programs Office (LPO) introduced the LPO Monthly Application Activity Report (MAAR) to help the general public understand the level of active interest from applicants in LPO financing programs, including: (1) the number of active applications, (2) the cumulative funding requested by those applications, (3) the rolling average of new applications per week, and (4) how application amounts requested break down across major clean energy and advanced transportation technology sectors.

As we head into 2023, LPO is marking the first anniversary of this new public reporting of application activity by providing some insights into application pipeline trends over the last year as well as expanding the MAAR reporting to include information about the geographic diversity of proposed project locations.

APPLICATION ACTIVITY INSIGHT # 1: THERE HAS BEEN A CONSISTENT UPWARD TREND IN APPLICATIONS AND CUMULATIVE LOAN AMOUNTS REQUESTED.

Throughout the first 14 months of LPO public application activity reporting, the month-to-month trends illustrate significant growth in interest in LPO loan and loan guarantee programs since November 2021:

The number of active applications has grown by almost 90%, with 66 as of November 30, 2021 and 125 as of December 31, 2022.
The cumulative dollar amount of LPO financing requested by those active applications has grown even more—from $53.6 billion at the end of November 2021 to $119.0 billion as of the close of December 2022 (a 122% increase).
The rolling average weekly rate of new applications has fluctuated during the same time period, from 2.1 per week in November 2021 to 1.4 per week in December 2022, but has remained consistently positive throughout the year.

APPLICATION ACTIVITY INSIGHT # 2: APPLICATIONS CONTINUE TO BE WELL-DISTRIBUTED ACROSS MAJOR CLEAN ENERGY AND ADVANCED TRANSPORTATION TECHNOLOGY SECTORS.

Likely reflective of the robust outreach and business development efforts that LPO has implemented over the same time period, the last 14 months of LPO application data shows a consistent trend toward parity between the major LPO technology areas.

Though the top three sectors by cumulative dollar amount requested shifted from month to month early on, they have remained relatively consistent in recent months, with applications for projects in the Advanced Vehicles & Components, Advanced Nuclear, and Biofuels sectors leading in total amount of financing requested. (For a full list of LPO MAAR reporting tech sectors and types of potentially eligible areas, see: Energy.gov/LPO/MAAR)

APPLICATION ACTIVITY INSIGHT # 3: TO BETTER CONVEY WHAT PROPORTION OF APPLICATIONS ARE NEARING POTENTIAL CLOSE ON LPO FINANCING, THE MAAR WILL PROVIDE EXPANDED REPORTING OF THE FULL PIPELINE.

Starting with the December 2022 MAAR, LPO is taking a fuller view of the pipeline, reporting on applications that are promising, but that are closer to the start of the evaluation process as well as those applications that are further along the process towards due diligence. Of the 125 active applications, approximately 45% of applications are under initial review, approximately 40% are under advanced review, and roughly 15% are in due diligence

APPLICATION ACTIVITY INSIGHT # 4: LPO IS SEEING BROAD GEOGRAPHIC DISTRIBUTION OF PROPOSED PROJECT LOCATIONS ACROSS THE UNITED STATES, AND WILL NOW REFLECT THAT IN MONTHLY REPORTING.

Applications for clean energy and advanced transportation financing are coming into LPO from across the country to help support and build projects from coast to coast and in every major region. LPO will now give the public a general idea of the locations of proposed projects from current active applications to provide a better sense of the pipeline’s geographic diversity while protecting business confidentiality of the applications.

As of the end of December 2022, LPO’s 125 active applications account for 152 proposed project locations across all regions of the U.S., representing potential real-world impact across the nation, including places like manufacturing facilities, generation plants, and service areas.

APPLICATION ACTIVITY INSIGHT # 5: CONTINUED FOCUS ON QUALITY APPLICATIONS, GOOD GOVERNANCE, AND RISK MANAGEMENT IS BORNE OUT BY RECENT CONDITIONAL COMMITMENTS AND LOAN ISSUANCES.

As encouraging as the application data has been over the last year, LPO’s focus remains squarely on cultivating high-quality applications, engaging with potential borrowers early in the process of seeking LPO financing—even before a formal application has been submitted—and working closely to help improve their project’s prospects from both a financial and technical perspective.

Perhaps the best indicator of that success has been the number of loans and loan guarantees that DOE has either issued a conditional commitment for financing since the monthly application activity reports began to be published in November 2021: