Show Me the Money: Notice of Proposed Rulemaking Related to Loan Guarantees for Projects That Employ Innovative Technologies
Aug 7, 2009 - Stoel Rives
On August 6, 2009, the Department of Energy ("DOE") issued a notice of proposed rulemaking to amend 10 CFR Part 609, the rule regulating the loan guarantee program authorized by section 1703 of Title XVII of the Energy Policy Act of 2005 (hereinafter the �Section 1703 Loan Guarantee Program�). The two principal goals of the Section 1703 Loan Guarantee Program are to encourage commercial use of new or significantly improved energy-related technologies and to achieve substantial environmental benefits. (See these recent alerts regarding the DOE loan guarantee program and the related application process.)
Many parties connected to the energy industry have informed DOE that the Section 1703 Loan Guarantee Program is too rigid in its requirement that DOE be in first lien position over all assets of the financed project. DOE has reported requests for more flexibility in the determination of an appropriate collateral package to secure guaranteed loan obligations, facilitate collateral sharing and related intercreditor arrangements with other project lenders, and provide a more workable interpretation of the statutory provisions regarding DOE�s treatment of collateral. Currently the Section 1703 Loan Guarantee Program requires that DOE take a first position lien over all project assets and does not allow other project lenders to take a pari passu interest in such collateral.
Furthermore, DOE has found that other parties are interested in participating as co-lenders, co-guarantors, or insurers of Title XVII loans. However, these other parties expect to share, on a pari passu basis, in any collateral securing such loans.
Consequently, DOE proposes two amendments to the current rules:
Interested parties have 30 days to provide comments to the proposed rule. Comments may be submitted in the following manner:
For more information, contact David Franz at the above address or by calling (202) 586-8336.
If you have questions about these or other renewable energy issues, or if you would like to discuss the possibility of your project applying for these or other government funds, please contact: