Gilbert Porter and Chris Wolfe in Law360: USDA Doors Still Open To Cleantech After DOE Loan Firestorm
The U.S. Department of Agriculture made loan guarantees to three biomass energy projects this month, a quiet reminder that after the political firestorm sparked by the U.S. Department of Energy's renewable financing program, one federal lending window is still open to clean technologies.
The loan guarantees, totaling about $341 million, went to biomass projects in Texas, Colorado and Hawaii. All three will turn wood pellets into fuel, a technology that, while far from science fiction, has yet to make a major dent in the U.S. energy market...
Without a history to lean on, these projects can't find commercial debt, experts said. Most U.S. banks won't lend to a technology that hasn't been in commercial use in the U.S. for at least five years, said Haynes and Boone LLP's Gilbert Porter.
"It's a small program, but an ambitious one," Porter said. "They're dealing with new technologies that don't have a track record, and they are going where the financial community won't yet go..."
"The DOE was a sprint. The USDA is more of a marathon," said Chris Wolfe, head of Haynes and Boone's cleantech practice. "It's a program focused on the long term, and it's enjoyed a little political protection because of that."
Excerpted from Law360, October 22, 2012. To view full article, click here (subscription required).