As implementation guidance regarding the Inflation Reduction Act (IRA) continues to be released, industry participants should pay close attention to the DOE Loan Program Office (LPO) as an emerging source of federal funding to support the US energy transition. In particular, with the creation of the Energy Infrastructure Reinvestment (EIR) Program, the LPO is authorized to issue $250 billion in low-cost debt to replace aging energy infrastructure with environmentally cleaner alternatives. Through a sevenfold expansion in lending authority, the LPO may now become a viable financial partner for a new segment of applicants who satisfy EIR program requirements. Furthermore, in a period of volatile interest rates and credit market uncertainty, this program may provide a novel opportunity for utilities and merchant generators to access low-cost credit.
- The EIR Program represents the largest expansion of the DOE LPO in its two-decade history. The program now has over $250 billion in lending authority, and opportunities for its use will be wide-ranging and extend to new industry participants.
- The EIR Program offers unique benefits to several stakeholders, with potential ratepayer savings on the utility side and substantial IRR increases for merchant generators.
- The program is scheduled to end by September 2026. Those who wish to utilize the EIR Program should begin assessing opportunities in the coming months to avoid missing program deadlines.