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Bankruptcies and investigations cloud DoE loan sunset
30 November 2011
The US Department of Energy loan programme office ended September under a welter of scrutiny and a drastic curtailment in its ability to close financings. As Beacon Power follows debut borrower Solyndra into chapter 11, more trouble may be in store. By Tom Nelthorpe.
When Jonathan Silver, then the executive director of the US Department of Energys loan programme office, spoke at Project Finances US Power & Renewables Finance Conference in March, he did not have good news for project sponsors. The 1705 authorisation, the source of most of the departments closed financings, and a product of the February 2009 American Recovery and Reinvestment Act, would not be renewed when it expired on 30 September 2011.
Silver explained just how little funding was left in the 1705 programme, which had proved popular with developers because the US taxpayer was paying the credit subsidy cost, effectively a premium for the guarantee, and because it was available to a wide variety of technologies.
Guarantees under the 1703 programme, which had been on offer since the 2005 Energy Policy Act, were confined to new or significantly improved technologies as compared to commercial technologies and borrowers had to pay the...
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