Department of Energy 1703 Loan Program

Section 1703 of Title XVII of the Energy Policy Act of 2005 authorizes the U.S. Department of Energy to support innovative clean energy technologies that are typically unable to obtain conventional private financing due to high technology risks. In addition, the technologies must avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases. Technologies we will consider include: biomass, hydrogen, solar, wind/hydropower, nuclear, advanced fossil energy coal, carbon sequestration practices/technologies, electricity delivery and energy reliability, alternative fuel vehicles, industrial energy efficiency projects, and pollution control equipment. Technologies with more than three implementations that have been active for more than five years are excluded. Title XVII specifies that the Energy Department must receive either an appropriation for the Credit Subsidy Cost (CSC) – the expected long-term liability to the Federal Government in issuing the loan guarantee – or payment of that cost by the borrower.  Under Section 1703, borrowers pay the CSC directly. In some cases, however, 1703 projects may also be eligible under 1705, thereby qualifying them for appropriated CSC.

An Eligible Project is a project that is:

 Located in the U.S. (Foreign ownership or sponsorship of the project is permissible so long as the project is located in one of the fifty states, the District of Columbia or a U.S. territory);

Employs a new or significantly improved technology that is NOT a commercial technology and that avoids, reduces or sequesters air pollutants or anthropogenic emissions. •A commercial technology means a technology in general use in the commercial marketplace in the U.S. at the time the term sheet is issued by the Department.

A technology is in general use if it has been installed in and is being used in three or more commercial projects in the U.S. in the same general application as in the proposed project, and has been in operation in each such commercial project for a period of at least five years by the time the term sheet is issued.

 Meets Davis Bacon requirements.