How Jigar Shah Strengthens DOE’s Loan Programs Office Again

Maybe you first met him as the Managing Director of Carbon War Room or as the co-founder of Generate Capital. Or maybe you saw it as a Mega-influencer LinkedIn, GreenBiz contributor or even as a former co-host of The Energy Gang podcast – he’s the one with the laughs ready and the sharp holds.

Chances are, you already know Jigar Shah. He has spent the past two decades convincingly defending the climate-fixing and profit-generating potential of clean energy, while combating uninformed skeptics and bad business models.

Now, as part of the Biden administration’s efforts to jump-start economy-wide decarbonization, Shah has been given more capital – and a bigger platform – than he ever would have. believed possible.

The total: $ 46 billion, according to Shah. It is the lending capacity that it can mobilize within the Ministry of Energy. Loan Programs Office (LPO), which he was appointed to oversee in March.

To make the office “once powerful”, as its boss Energy Secretary Jennifer Granholm Put thepowerful yet, Shah faces great challenges. The office has been virtually inactive for much of the past decade, in part due to the deprization of the Trump era, but it has also been hampered by a lingering reputation for bureaucratic dysfunction.

Shah sees his office’s role as narrowly focused – providing catalytic financing at a key stage, before companies can access commercial debt.

Just three months after starting his new role, Shah joined VERGE Electrify this week to kick off the conference and share his plans to get the loans back on track, new role in an introductory conversation with GreenBiz Group Senior Transportation Analyst , Katie Fehrenbacher, who co-chaired the event.

Restarting the LPO. After a decade of dormancy, the office has moved into a fast-forward mode, fueled by Biden’s climate agenda and Shah’s contacts – he has contacted more than 100 CEOs since his arrival. “People are starting to realize that we are open for business,” he said. “While we have had maybe three applications all last year, we’ve had three a week recently. It comes from people who trust the program will be there for them.

A catalytic role. As deep as LPO’s loan pool may be, Shah sees his office’s role as narrowly focused: to provide catalytic finance at a key stage, before companies can access commercial debt. Take the example of nuclear energy innovators such as Oklo, NuScale or Holtect. “Small modular reactors are going to be built across the country,” Shah said. But they probably won’t be able to take on commercial debt until the technology is out of risk. Shah sees the role of LPO as building a bridge to bankability: “So, we’re done.”

Streamline the process. By taking a simpler, more user-friendly approach, Shah is tackling the office’s lingering reputation head-on for being too expensive, too complex, and too time-consuming. “We have removed all application fees,” he said. “And we don’t charge any of the other fees that we used to pay until you get the loan and start taking it out.”

Boosting climate justice. Shah sees a space where the LPO has the potential to modernize the network and benefit historically disenfranchised communities. Virtual power plants offer the potential to advance grid-wide energy services while helping cities and communities modernize energy infrastructure and reduce energy costs. This could mean building solar power with storage in social housing or financing affordable smart grid-sensitive air conditioners or water heaters. Models like these promise “not only to put affordable essential devices in the hands of the people who need them,” Shah said, “you can also achieve higher usage rates through the existing distribution infrastructure. ”

We want everyone who thinks they have a great idea that deserves funding to have a chance.

Stick swings. To the thorny question of how to pick winners from emerging technologies, Shah brings the perspective of a seasoned climate tech entrepreneur. “We have to take a lot of batting,” Shah said, “and we’re going to have some duds.” But misses – with a nod to the Solyndra failure, an Obama-era solar startup – may be offset by colossal successes, such as Tesla to which the DOE loaned $ 465 million in 2010, a time when the then fledgling EV maker was much closer to failure than world domination. Today, it is the world’s most valuable automaker and has sparked a competitive race to electrify the auto industry. “That’s what the president talked about,” Shah said. “We want to make sure that from a technological standpoint, we are leading the pack around the world.”

Tips for loan applicants. “Do not be afraid! Come early, ”Shah advised. To be sure: there will be many forms, but Shah’s team are working to make sure the process is easier to navigate than before. Over the past month, the office has added more than 10 people to walk applicants through the loan process. “We want everyone who thinks they have a great idea that deserves funding to have a chance.”

If you are one of these people, the initial review process typically takes six weeks. Once qualified, getting to the approval stage takes four to five months of diligence.

Until then, Shah’s office will announce the first batch of new loans under the Biden administration by the fall, if not sooner.

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