Secretary Chu is working on getting stimulus money into CleanTech projects
Yesterday, two days after President Obama signed the stimulus bill (American Recovery and Reinvestment Act or ARRA) into law, DOE Secretary Steven Chu announced a reorganization of how the Department of Energy will disperse loans, loan guarantees and funding contained therein.
Obviously, the idea is that there will be a disbursement of money to begin investments into the economy which will put Americans back to work and create millions of new jobs. What is good for CleanTechies like you and me is that there’s a leader at the helm Department of Energy that is keen on energy efficiency and renewables because it is the DOE that will be in a position to bring relevant projects to the table. More great news is he’s added ex-McKinsey consultant Matt Rogers to the team, a long time analyst of energy issues and climate change. It is great to have such strong representation from the business community within the DOE.
“These changes will bring a new urgency to investments that will put Americans back to work, reduce our dangerous dependence on foreign oil, and improve the environment.” Secretary Chu said. “We need to start this work in a matter of months, not years – while insisting on the highest standard of accountability.”
Here is what the DOE set forth yesterday as goals:
- Begin offering loan guarantees under the Department’s previous loan guarantee program by late April or early May. (DOE will have at least completed its review).
- Begin offering loan guarantees under the new Recovery legislation by early summer. Again, these offers may still require recipients to secure their own share of the financing or meet other conditions prior to closing.
- Disperse 70 percent of the investment from the American Recovery and Reinvestment plan by the end of next year.
The word on the street is that Secretary Chu himself has been reviewing the Department’s process for issuing direct loans, loan guarantees and other funding – let’s hope it is with the aim of making the funding process faster, simpler and more accountable. These are the reforms he’s proposing:
- Rolling appraisals of applications – instead of delaying the consideration of an application until a far off deadline, the Department will review them when they are submitted so that decisions can be made more quickly.
- Streamlining and simplifying loan application forms and other paperwork.
- Accelerated loan underwriting by using outside partners.
- In cases where up-front fees may deter companies from applying, the Department will offer applicants the opportunity to pay the fees as part of the loan at closing.
- Further reduction of up front costs by restructuring credit subsidies so they are paid over the life of the loan.
- Additional staff and resources to process applications.
- Working with the industry to attract good projects into the loan guarantee program and helping them navigate the process.
- A website that will provide increased transparency in both process and results, as well as information to help applicants through the process.
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