CHICAGO--(BUSINESS WIRE)--When the U.S. Department of Energy (DOE) Loan Programs Office begins evaluating applications for loan guarantees on renewable energy and efficient energy projects, the expected $4 billion in granted financing will offer a return to the roots of Title XVII financing, said a new Fitch ratings report.
'Projects seeking funding must use new or significantly improved technology that avoid, reduce, or sequester greenhouse gases. Eligible projects must utilize renewable energy systems, efficient electrical generation, energy storage, transmission and distribution technologies, or efficient end-use energy technologies,' said Gregory Remec, Senior Director with Fitch's Global Infrastructure Group.
The DOE will favor projects that may be unable to obtain full commercial financing due to perceived risks accompanying newer technologies. Eligible projects offering a catalytic effect on subsequent projects, which replicate or extend the innovative features of eligible projects, may also be favored.
In determining which applicants advance, the DOE will assess whether a project provides a reasonable prospect of repaying all project debt, and whether available capital from all sources will be sufficient to carry out a project.
The DOE encourages the participation of other lenders. There is no limit to the loan amount that can be guaranteed for any single project, subject to available funding, but the guaranteed loan can comprise no more than 80% of the total project costs. No minimum credit rating is specified for this solicitation.
The full special report titled 'DOE Loan Guarantee Program Extension' is available on the Fitch Ratings web site at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
Applicable Criteria and Related Research: DOE Loan Guarantee Program Extension (New Solicitation Returns to Greenhouse Gas Roots)