The Loan Programs Office’s (LPO) FY 2024 Budget Request, released yesterday, comes at a time of historically high activity for LPO—having announced three new conditional commitments to Li-Cycle, Redwood Materials, and Ioneer Rhyolite Ridge in the first two months of 2023. In addition, applicant interest in LPO as the nation’s largest source of financing for eligible energy and supply chain technologies continues to grow, with over $124 billion in active applications as of February 2023. Under its Title 17 Innovative Clean Energy Loan Guarantee Program, LPO expects to make approximately $6 billion in loan guarantee commitments in FY 2023 and $20 billion in FY 2024 to new and innovative clean energy deployment and supply chain projects. Under the Advanced Technology Vehicles Manufacturing Loan Program (ATVM), LPO expects to close approximately $15 billion in loans in FY 2023 and $16 billion in FY 2024 across various advanced technology vehicle and component projects.
To support this growth, the FY 2024 Request builds on LPO's efforts to originate new deals, continue monitoring the expanded portfolio, and continue robust outreach efforts to attract new applicants across loan programs.
The cumulative LPO Request for FY 2024 represents an overall increase of $14.9 million above the FY 2023 enacted level, to catalyze innovation and investments across all industries in the U.S. energy sector; promote technological advances; and increase energy affordability, performance, and efficiency. While LPO is seeking increases in Administrative Expenses across its accounts, projected offsets from fees collected from Title 17 borrowers are estimated to increase from a projected $35 million in FY 2023 to $196.5 million in FY 2024. LPO’s Budget helps meet the Administration’s objectives of a carbon-pollution free electric sector by 2035 and net-zero emissions, economy-wide, by 2050, while helping to achieve the Administration's objectives for placed-based initiatives and Justice40 investments.
Budget Request Summary by Program
TITLE 17 INNOVATIVE CLEAN ENERGY LOAN GUARANTEE PROGRAM
ADVANCED TECHNOLOGY VEHICLES MANUFACTURING LOAN PROGRAM
TRIBAL ENERGY LOAN GUARANTEE PROGRAM
The FY 2024 Budget Request includes $70 million for Title 17 administrative expenses, wholly offset by an estimated $196.5 million in collected fees. The Request continues progress under Title 17 in originating and monitoring loans, aided by the release of an updated Title 17 Rule and Program Guidance that incorporates relevant amendments from the Energy Act of 2020, the Bipartisan Infrastructure Law (BIL), and the Inflation Reduction (IRA).
For ATVM, the FY 2024 Request continues to support loans to onshore and scale-up the manufacturing of eligible vehicles and qualifying components. The BIL expanded the definition of “advanced technology vehicle” to include medium- and heavy-duty vehicles, locomotives, maritime vessels, and aviation, which can help further reduce transportation emissions and create good-paying jobs. This Request includes $13 million for administrative expenses to support the continued expansion of the ATVM portfolio, including for projects under the newly authorized authorities.
For the Tribal Energy Loan Guarantee Program (TELGP), the FY 2024 Request includes $6.3 million for administrative expenses to continue origination and outreach activities. In the Consolidated Appropriations Act, 2022, Congress enacted a change for that Fiscal Year, which was subsequently made permanent by the IRA and the Consolidated Appropriations Act, 2023, to broaden TELGP authority to allow applicants to apply for direct loans financed by the United States (U.S.) Treasury Federal Financing Bank and guaranteed by the Department, in addition to partial loan guarantees of other eligible lenders. This change—in addition to other changes in FY 2022 to the TELGP solicitation to clarify ownership requirements, lending obligations, and fees—has increased interest in and accessibility to TELGP loans.
The FY 2024 Budget Request builds on the Consolidated Appropriations Act, 2023, which removed the prohibition on the use of existing authority and appropriated credit subsidy for the newly expanded project eligibilities from BIL. This means that now, thanks to Congressional efforts, DOE has the ability to support innovative domestic critical mineral supply chain projects; as well as projects backed by State Energy Financing Institutions (SEFIs), including Green Banks or state energy authorities, which do not need to meet the Title 17 innovative requirement.
Across its loan programs, LPO’s FY 2024 Request will allow it to support its growing portfolio effectively while also stewarding the taxpayer’s dollar dutifully. In addition, the Request will allow LPO to play a key part in the Biden Administration’s efforts to achieve a net-zero emissions economy, support and provide clean energy benefits to underserved and overburdened communities, and support the manufacture and deployment of clean energy technologies in the United States.
Original source can be found here.
