US Department of Energy pledges to accelerate green loans

The US Department of Energy (DoE) last week vowed to streamline the process for issuing green loans and grants, pledging to have the first wave of loan guarantees announced as part of the new US economic stimulus package approved by the beginning of May.

As part of president Obama's stimulus bill, $6bn of loan guarantees are to be offered to developers of renewable energy or electricity transmission projects, assuring lenders that the government will pick up the bill if project developers default on repayments.

In a move that will delight a US renewables industry increasingly dogged by tightening credit conditions, energy secretary Steven Chu said that the first applications for loan guarantees would be approved by the end of April or beginning of May.

The deadline was set as part of a major overhaul of DoE funding mechanisms designed to make it far easier for green projects to access government incentives.

Chu said the department would streamline much of the paper work involved in applying for grants and loans, in some cases cutting forms down from more than 500 pages to fewer than 50 pages, while carrying out rolling appraisals of applications.

He added that more staff would be appointed to handle the expected influx in applications, while any funding requiring up-front fees from developers would be restructured to ensure the fees are paid back over time as part of any loan.

"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," said Chu. "We need to start this work in a matter of months, not years, while insisting on the highest standard of accountability."