US DoE loan guarantee programme expands
After a hiatus of almost three years, the United States Department of Energy (DOE) announced new funding allocation for its renewable energy loan guarantee program (LPO). Over $4 billion in financing will be made available to transactions that bring catalytic changes to the US electricity grid system.
After a hiatus of almost three years, the United States Department of Energy Please wait... (DoE) announced new funding allocation for its renewable energy loan guarantee programme (LPO). Over $4 billion in financing will be made available to transactions that bring catalytic changes to the US electricity grid system. Called the renewable energy and efficient energy projects solicitation (or REEE), this round focuses on grid resiliency such as battery storage and grid integration of renewable projects. REEE's five featured grid balancing technology sectors are:
- Advanced grid integration and storage
- Biofuels (bio-refineries delivering commercial grade fuels)
- Waste-to-energy (commercial scale landfill gas recovery, crop waste, forestry waste)
- Enhancement of existing facilities (hydro and wind power plant production boosts)
- Efficiency improvements (reduction in greenhouse gas emission projects)
Grid modernisation is a critical integration component of the growth of solar and other renewables utility scale energy projects coming on line in the next several years. Did you know that a new distributed PV solar installation will occur every 83 seconds in the United States through 2016? The DoE is stepping back into the market to facilitate the financing of grid stabilisation projects. Despite a few challenging projects in the previous round of renewable financing from the DoE, over 95% of the projects are economic and successfully completed. Public comments related to REEE are being taken until mid-May, and the solicitation will be finalized by June 2014. Click here to review the solicitation for comments. To ask solicitation questions, send an email to: [email protected].
In addition to the grid solicitations, the DoE LPO is actively taking solicitations for up to another $8 billion in advanced fossil fuel (AFF) projects. The solicitation for AFF applications can be found here. Offering loan term, cost effective financing for new technologies is the foundation of the DoE LPO.
In ECA news:
Scorpio Tankers Please wait... , based in New York, closed a unique vessel financing with Export-Import Bank of Korea (Kexim). First of its kind worldwide, Kexim is guaranteeing $125 million for a vessel-backed bond. According to TankerNews, "A vessel-backed bond is a financial product that allows an overseas shipowner to issue a bond to finance its ship purchase from a South Korean shipbuilder, while Kexim guarantees the bond’s principal." Kexim is also providing a $175 million direct loan, which collectively with the vessel bond, will finance 57 fuel-efficient, Korean built tankers for Scorpio's fleet. Expect Kexim to aggressively pursue this type of ship financing structure through its $4billion shipowner financing method.
Solena Fuels and British Airways Please wait... are developing Greensky London Project, an innovative biofuels refinery that will convert landfill waste to commercial grade jet fuel. The team announced it will locate at Thames Enterprise Park, cite of the former Coryton refinery in Essex. ECA financing is being arranged by Barclays Please wait... ; the project is expected to be operational by 2017.
Operators of Indonesia's port facilities are in advanced negotiations on a combined ECA and bank financing. The Pelindo transaction is expected to total over $200 million.
The Government of Nepal has requested $400million in concessional financing from China in support of transmission lines to service the 750MW West Seti hydropower project. Chinese developer group CWE Investment Corporation (a subsidiary of China Three Gorges Corporation) is building West Seti with completion targeted for 2019. Exim Bank of China has agreed to finance $1.2 billion of the $2 billion project.
Later this week, US Ex-Im celebrates 80 years supporting US exports. The annual conference is expected to draw over 1,000 exporters, buyers, financial institutions and other industry leaders. We look forward to seeing friends and business colleagues from around the world, and discussing new opportunities in the days ahead. Safe travels and see you in Washington!