Strengthening the Loan Program
February 10, 2012 - 4:08pm
Today, the White House issued its Independent Review on the health of the Department’s clean energy loan portfolio. The following is Secretary Chu’s statement thanking Herb Allison for his review:
"I appreciate the work Mr. Allison and his team have done to review the health of our clean energy loan portfolio. I will carefully review the thorough, thoughtful recommendations Mr. Allison has put forward and find the best way to use them to further strengthen the program.
“Mr. Allison’s review rated the overall risk in the loan portfolio slightly lower than the Department itself projected and far less than the loan loss reserve Congress originally budgeted for when Congress created and funded the program. The report makes clear that the Department was operating under Congressional requirements to provide loans to projects that would have trouble obtaining private financing, which is why Congress appropriated funds for a loan loss reserve.
"DOE's loan program is generating $40 billion in private investment in America’s economy that is supporting 60,000 direct jobs and many thousands more up and down the supply chain. With the help of this program, American workers will build wind, solar, geothermal and nuclear power plants across the country that will power our economy for decades to come – and the next generation of automobiles that will reduce our dangerous dependence on foreign oil. And these numbers don’t include the investments made in the supply chain or from other investments made from projects that have been able to get financing because the loan program helped structure and establish a market for them.
"We have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed, but the vast majority of companies are expected to pay the loans back in full, on time, and with about $8 billion in interest – while supporting a total of 60,000 American jobs and helping us compete for a rapidly growing global industry."
"I appreciate the work Mr. Allison and his team have done to review the health of our clean energy loan portfolio. I will carefully review the thorough, thoughtful recommendations Mr. Allison has put forward and find the best way to use them to further strengthen the program.
“Mr. Allison’s review rated the overall risk in the loan portfolio slightly lower than the Department itself projected and far less than the loan loss reserve Congress originally budgeted for when Congress created and funded the program. The report makes clear that the Department was operating under Congressional requirements to provide loans to projects that would have trouble obtaining private financing, which is why Congress appropriated funds for a loan loss reserve.
"DOE's loan program is generating $40 billion in private investment in America’s economy that is supporting 60,000 direct jobs and many thousands more up and down the supply chain. With the help of this program, American workers will build wind, solar, geothermal and nuclear power plants across the country that will power our economy for decades to come – and the next generation of automobiles that will reduce our dangerous dependence on foreign oil. And these numbers don’t include the investments made in the supply chain or from other investments made from projects that have been able to get financing because the loan program helped structure and establish a market for them.
"We have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed, but the vast majority of companies are expected to pay the loans back in full, on time, and with about $8 billion in interest – while supporting a total of 60,000 American jobs and helping us compete for a rapidly growing global industry."
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