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pdfLOAN GUARANTEE
SOLICITATION ANNOUNCEMENT
U.S. Department of Energy
Loan Programs Office
FEDERAL LOAN GUARANTEES FOR ADVANCED FOSSIL
ENERGY PROJECTS
Solicitation Number: DE-SOL-0006303
OMB Control Number: 1910-5134; OMB Expiration Date 11/30/2016
Announcement Type: Initial
Issue Date:
First Part I Submission Due Date:
First Part II Submission Due Date:
Last Part I Submission Due Date:
Last Part II Submission Due Date:
1
2
December 12, 2013
February 28, 20141
May 31, 20142
October 31, 2015
February 28, 2016
Please refer to Section V.A. for multiple due dates regarding Part I submissions.
Please refer to Section V.A. for multiple due dates regarding Part II submissions.
TABLE OF CONTENTS
I. Solicitation Description ..................................................................................................................................... 1
A. Purpose of Solicitation .......................................................................................................................... 1
B. Background ............................................................................................................................................ 1
II. Eligibility Information ..................................................................................................................................... 1
A. Project Eligibility................................................................................................................................... 1
B. Illustrative Types of Eligible Projects ................................................................................................... 3
C. Scope of Solicitation .............................................................................................................................. 4
III. Application Requirements ................................................................................ Error! Bookmark not defined.
A. Required Information and Materials ..................................................................................................... 4
B. Compliance with NEPA Regulations .................................................................................................... 4
C. Davis-Bacon Requirements ................................................................................................................... 5
D. Cargo Preference Act of 1954 Requirements………………………………………………………… 6
IV. Application and Evaluation Process .............................................................................................................. 6
A. Application Components ....................................................................................................................... 6
B. Loan Guarantee Process Overview ........................................................................................................ 7
C. Summary of Application Evaluation ..................................................................................................... 8
D. Review of Financial Factors ................................................................................................................ 10
E. Review of Technical Factors ............................................................................................................... 10
F. Review of Programmatic Factors ......................................................................................................... 12
G. Review of Policy Factors..................................................................................................................... 12
H. Review and Determination to Proceed ................................................................................................ 13
I. Notification ........................................................................................................................................... 13
J. Government Right to Reject or Negotiate ............................................................................................ 13
V. Application Schedule and Instructions ......................................................................................................... 13
A. Application Submission Schedule ....................................................................................................... 13
B. Electronic Application Submissions .................................................................................................... 14
C. Registrations ........................................................................................................................................ 14
D. Additional Application Submission Media ......................................................................................... 15
E. Formatting Instructions ........................................................................................................................ 15
F. Multiple Applications........................................................................................................................... 18
G. Required Certification ......................................................................................................................... 18
VI. Fees, Costs, and Expenses............................................................................................................................. 18
A. Fees ...................................................................................................................................................... 18
B. Loan Guarantee Credit Subsidy Cost .................................................................................................. 19
C. Independent Consultants and Outside Counsel to DOE ...................................................................... 20
D. Extraordinary Expenses ....................................................................................................................... 20
VII. Additional Provisions .................................................................................................................................. 20
A. Commitment of Public Funds .............................................................................................................. 20
B. Procurement or Financial Assistance Award ....................................................................................... 20
C. Warning ............................................................................................................................................... 20
D. Restrictions on Disclosure and Use of Information ............................................................................ 21
E. Burden Disclosure Statement ............................................................................................................... 22
F. Questions .............................................................................................................................................. 22
VIII. References ................................................................................................................................................... 22
ATTACHMENT A – Application Submission Instructions ............................................................................ 24
Part I Submission...................................................................................................................................... 24
Sample Letter of Commitment ................................................................................................................. 29
Part II Submission .................................................................................................................................... 31
ATTACHMENT B – National Environmental Policy Act (NEPA) Compliance .......................................... 39
ATTACHMENT C – Summary Lifecycle GHG Emissions Data Worksheet………………………..… 42
Loan Guarantee Solicitation Announcement
Advanced Fossil Energy Projects
UNITED STATES
DEPARTMENT OF ENERGY
FULL ANNOUNCMENT
Loan Guarantee Solicitation for Applications for Advanced Fossil Energy Projects
Solicitation Number: DE-SOL-0006303
I.
Solicitation Description
A. Purpose of Solicitation
Applicants are invited to apply for loan guarantees from the United States Department of Energy
(“DOE”) under Title XVII of the Energy Policy Act of 2005, as amended, 42 U.S.C. §§16511-16516
(“Title XVII”). Under this Solicitation (“Solicitation”), DOE seeks Applications for loan guarantees to
finance projects and facilities located in the United States that employ innovative and advanced fossil
energy technologies (“Advanced Fossil Energy Projects”) that avoid, reduce, or sequester anthropogenic
emission of greenhouse gases.
B. Background
This Solicitation is issued under Title XVII and the implementing regulations set forth in Part 609 under
Chapter II of Title 10 of the Code of Federal Regulations (the “Final Regulations”), and is subject to all
of the terms and conditions thereof. Copies of the authorities cited herein may be found at
http://loanprograms.energy.gov (the “Program Website”). Applicants should familiarize themselves
with this guidance before submitting an Application. Capitalized terms defined herein have the meanings
ascribed to them in this Solicitation. Capitalized terms used but not defined herein have the meaning
ascribed to them by the Final Regulations.
DOE will make up to Eight Billion Dollars ($8,000,000,000) in loan guarantee authority available under
this Solicitation for Advanced Fossil Energy Projects. DOE’s authority to issue this amount of loan
guarantees was provided by the Omnibus Appropriations Act, 2009, P.L. No. 111-8, as amended by
Section 408 of the Supplemental Appropriations Act, 2009, P.L. No. 111-32 (the “2009 Appropriations
Act”) and remains available until committed. The loan shall be senior secured debt.
Applicants must submit Applications in response to this Solicitation in accordance with the detailed
instructions provided in Section V, Attachment A, and Attachment B.
II.
Eligibility Information
A. Project Eligibility
Before seeking a loan guarantee, an Applicant is strongly encouraged to verify that its project (the
“Project”) is not eliminated by the threshold determinations set forth in Section 609.7(a) of the Final
Regulations and that all of the eligibility requirements of Title XVII, the Final Regulations, and this
Solicitation are met.
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An “Eligible Project” under this Solicitation is a Project located in the United States that:
1.
Uses advanced fossil energy technology (within the meaning of that term in Section 1703(b)(2)
of Title XVII) and is described in one or more of the following technology areas:
a)
Advanced Resource Development. Projects that employ new or significantly improved
technologies to economically develop, recover, and produce traditional and non-traditional
fossil energy resources with reduced greenhouse gas emissions;
b)
Carbon Capture. Projects that integrate fossil fuel usage in traditional processes with
new or improved technology that captures and removes CO2 for permanent storage in
underground formations or through beneficial reuse;
c)
Low-Carbon Power Systems. Projects that use fossil fuels for electricity generation
using novel processes or improved technologies that can seamlessly integrate with CO2 capture
and storage or beneficial reuse; or
d)
Efficiency Improvements. Projects that incorporate new or improved technologies to
increase efficiencies and substantially reduce greenhouse gas emissions associated with fossil
fuel supply and use; and
2.
Meets both of the following requirements:
a)
and
Projects that avoid, reduce, or sequester anthropogenic emission of greenhouse gases;
b)
Projects that employ New or Significantly Improved Technology as compared to
Commercial Technology in service in the United State at the time the Term Sheet is issued.
Subject to limited exceptions that are set forth in the 2009 Appropriations Act, DOE will not be able to
issue loan guarantees to projects that will benefit directly or indirectly from certain other forms of federal
support, such as grants or other loan guarantees from federal agencies or entities, including DOE, federal
agencies or entities as a customer or off-taker of the Project’s products or services, or other federal
contracts, including acquisitions, leases and other arrangements, that support the Project.
Applications for loan guarantees for projects that could be fully financed on a long-term basis by
commercial banks or others without a federal loan guarantee will be viewed unfavorably. Evaluation of
this factor may occur until a Conditional Commitment is issued and may be among the factors considered
if a request is made to extend the termination date of a Conditional Commitment. While DOE will gather
information regarding the expected rates of return for investors and developers, given the significant
importance of motivated equity sponsors in a transaction, DOE does not anticipate establishing
requirements regarding such metrics.
Mandatory criteria that DOE will use during each round of Part I and Part II reviews in determining which
Project Sponsors/Applicants will proceed to the next stage are (1) whether the Project provides a
reasonable prospect of repayment of the principal and interest on the Guaranteed Obligation and other
Project debt, and (2) whether the Guaranteed Obligation, when combined with amounts available from
other sources, will be sufficient to carry out the Project. If these mandatory requirements are not validated
in any given round of Part I or Part II reviews, such Application will not receive further consideration.
Neither Title XVII nor the Final Regulations restrict the status of Applicants to for-profit entities.
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Advanced Fossil Energy Projects
Projects that do not meet the criteria set forth in this Section II.A may be eligible to apply for a loan
guarantee under separate, future Solicitations. Please visit the Program Website for guidance regarding
other Solicitations.
B. Illustrative Types of Eligible Projects
The following sample list of potential types of Eligible Projects is provided for illustrative purposes only.
The sample list is not intended to be, and is not, exclusive nor limiting. It is simply intended to
identify types of projects that could be eligible, subject to technical review. Submitting an
Application that supports a Project that fits within one or more of the illustrative categories set forth below
does not assure that such Application will be selected to receive a loan guarantee. Moreover, all eligible
Projects, regardless of type, must avoid, reduce, or sequester anthropogenic emission of greenhouse gases
and employ New or Significantly Improved Technology. These may include but are not limited to:
1.
Advanced Resource Development:
a) Novel oil and gas drilling, stimulation, and completion technologies, including dry fracking,
that avoid, reduce, or sequester anthropogenic emission of greenhouse gases;
b) Use of associated gas production to reduce flaring;
c) Coal-bed methane recovery to reduce methane emissions into the atmosphere associated
with coal mining;
d) Underground coal gasification; or
e) Methane emissions capture from production, transmission or distribution;
2.
Carbon Capture:
a) CO2 capture from synthesis gases in fuel reforming or gasification processes;
b) CO2 capture from flue gases in traditional coal or natural gas electricity generation; or
c) CO2 capture from effluent streams of industrial processing facilities;
3.
Low-Carbon Power Systems:
a) Coal or natural gas oxycombustion;
b) Chemical looping processes;
c) Hydrogen turbines; or
d) Synthesis gas, natural gas, or hydrogen based fuel cells;
4.
Efficiency Improvements:
a) Combined heat and power;
b) Waste heat recovery on industrial facilities;
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Advanced Fossil Energy Projects
c) High-efficiency distributed fossil power systems; or
d) High temperature materials for fossil-based systems.
Additional illustrative examples of energy efficiency projects, some of which are also listed in connection
with the categories listed above, may include: distributed generation (kW- to low MW-scale power
generation that provides electricity and/or heat to distributed loads such as hospitals, airports, and hotels),
fuel cells, micro turbines, micro-combined heat and power applications, high temperature materials that
improve the overall efficiency of power plants and industrial facilities, super alloys and ceramic
refractories, waste heat recovery to improve the overall efficiency of power plants and industrial facilities,
novel combined heat and power systems that can provide district heating and cooling services to nearby
buildings, and storing CO2 in geologic sites or using the gas for enhanced oil recovery (EOR)
Applications. These more specific examples are not intended to be, and are not, exclusive nor
limiting. They are mentioned solely with the intent of identifying types of energy efficiency projects
that could be eligible, subject to technical review.
C. Scope of Solicitation
For the avoidance of doubt, and without intending to modify the requirements of an Eligible Project set
forth above, DOE notes that the scope of this Solicitation is intended to be broad. All fossil fuels,
including, without limitation, coal, natural gas, oil, shale gas, oil gas, coal-bed methane, methane hydrates,
and others, are included in references in this Solicitation to “fossil fuels.” DOE will consider both
electrical and non-electrical fossil energy use. Subject to the requirement, among others, that the
technology be concerned with the production, consumption, or transportation of energy, Eligible Projects
may involve any part of the full lifecycle of fossil energy development (resource, process, products,
downstream, etc.). Provided that they are Eligible Projects, efficiency improvements to conventional
processes are included in the scope of this Solicitation.
III.
Application Requirements
In accordance with Title XVII and the Final Regulations, this Solicitation requires Applicants to submit
timely information in sufficient detail to support a thorough analysis of the Project’s compliance with the
objectives and requirements established by Title XVII, the Final Regulations, and this Solicitation, as well
as the rigorous underwriting criteria appropriate for projects of this scale. All information that DOE
collects will be used and stored in accordance with DOE-approved policies and procedures.
A. Required Information and Materials
1.
Required Materials: Attachment A and Attachment B set forth the information and materials
DOE requires from an applicant for the applicant to demonstrate compliance with the
information collection requirements of 10 CFR Part 609.
2.
Additional Requested Information: In addition to information requested in this Solicitation,
each Applicant may also be required to submit additional information subsequently requested
by DOE in order to clarify an Application.
B. Compliance with NEPA Regulations
The National Environmental Policy Act (“NEPA”) requires federal agencies to consider the potential
environmental impacts of their proposed actions. DOE must complete NEPA review before it makes a
decision to provide a loan guarantee. Therefore NEPA compliance is integrated into DOE’s Loan
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Guarantee Program decision-making procedures to ensure that a project’s environmental impacts are
properly considered.
1.
There are three possible levels of NEPA for an Applicant’s Project:
a) Environmental Impact Statement (“EIS”): For projects expected to have significant effects
on the quality of the human environment (biological, physical, and socio-cultural
resources);
b) Environmental Assessment (“EA”): For projects with the potential to significantly impact
biological, physical, and socio-cultural resources; and
c) Categorical Exclusion (“CX”): For projects that meet the conditions for excluding the
requirement to prepare an EA or EIS because analysis of similar actions has determined
such actions will not have significant impacts (e.g., re-equipping and retooling within
existing facilities).
2.
The NEPA review process begins once the Project has been accepted into the Loan Programs
Office continued due diligence phase following Part II review. If DOE invites a Project
Sponsor to begin negotiations for a loan guarantee, unless an EA or EIS has been prepared for
the Project by another federal agency, DOE will evaluate the Project to determine the
appropriate level of NEPA review required.
3.
The Applicant, with DOE oversight, is responsible for providing all necessary analysis and
documentation to comply with NEPA and the applicable implementing regulations in the Code
of Federal Regulations (“CFR”) (40 CFR 1500-1508 and 10 CFR 1021).
4.
An EIS typically requires an 18-24 month processing time, and an EA typically requires 6-9
months. Examples of projects normally requiring an EA or an EIS can be found in the DOE
NEPA implementing regulations at 10 CFR 1021, Appendix C and D to Subpart D,
respectively. A list of actions potentially eligible for categorical exclusion to the EA or EIS
requirements can be found at 10 CFR 1021 Appendix B to Subpart D.
5.
Once DOE initiates the NEPA review process, Applicants should consult with DOE before
commencing any work on the Project site (beyond preliminary design activities). Such
consultation is necessary as certain actions that could cause adverse environmental impacts or
limit the choice of available alternatives for the Project may not be allowable during the NEPA
review process and could result in discontinuing consideration of an Application or terminating
an outstanding Conditional Commitment.
6.
NEPA review must be completed before a loan guarantee can be issued.
Additional information on the NEPA process for loan guarantee projects is available in Attachment B and
on the Program Website at:
http://lpo.energy.gov/resource-library/nepa-regulations
C. Davis-Bacon Requirements
All laborers and mechanics employed by contractors and subcontractors in the performance of
construction work financed in whole or in part by a loan guaranteed under Title XVII shall be paid wages
at rates not less than those prevailing on projects of a character similar in the locality as determined by the
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Advanced Fossil Energy Projects
Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code (the
“Davis-Bacon Act”). Each Borrower will be required in the Loan Guarantee Agreement to make
representations and warranties, agree to covenants, and satisfy conditions precedent to closing and to each
disbursement that, in each case, relate to its compliance with the Davis-Bacon Act and all applicable
Davis-Bacon Act regulations, including all requirements set forth in 29 CFR Part 5 and the wage
determination schedule(s) applicable to the Project. Borrowers are advised that, in accordance with the
Davis-Bacon Act and its implementing regulation at 29 CFR 1.6(g), the Davis-Bacon Act obligations
described above for construction work financed in whole or in part with a Title XVII loan guarantee must
be complied with beginning with the “construction, prosecution, completion or repair” (as defined in 29
CFR 5.2(j)) of such Project, regardless of whether the closing of the DOE loan guarantee has occurred. An
exception to the requirement to comply prior to closing of the DOE loan guarantee is available if the
Administrator of the Wage and Hour Division, Employment Standards Administration, United States
Department of Labor (“DOL”) finds that it is necessary and proper in the public interest to prevent
injustice or undue hardship and there is no evidence of intent to apply for federal funding or assistance
prior to the start of construction.
Applicants should visit the DOL website at
http://www.dol.gov/whd/govcontracts/dbra.htm and the Program Website for additional guidance
regarding the Davis-Bacon Act and its related acts.
D. Cargo Preference Act of 1954 Requirements
All Projects that receive a loan guarantee under this Solicitation must comply with the Cargo Preference
Act of 1954, which establishes certain requirements for the use of U.S. flagged vessels in the movement
of cargo in international waters. These requirements may apply to shipments contracted for or made prior
to receiving or applying for a loan guarantee. DOE urges Applicants to contact the Maritime
Administration directly to ensure that relevant Project agreements provide for compliance with the Cargo
Preference Act.
General information on cargo preference can be found at the Maritime Administration’s web site:
www.marad.dot.gov/cargopreference. You may also address questions on cargo preference to the
Maritime Administration’s Office of Cargo Preference and Domestic Trade at (202) 366-4610 or via
email to [email protected] .
IV.
Application and Evaluation Process
A. Application Components
The Application is divided into a Part I submission and a Part II submission. Detailed instructions for the
contents of the Parts I and II submissions are set forth in Attachment A.
Part I: The Part I submission provides DOE with a description of the Project, technical information,
background information on management, financing, construction, and operating strategies, and progress to
date of critical path schedules. These schedules include items such as obtaining licenses or regulatory
permits and approvals, site preparation and long-lead procurements, and are used as a basis for
determining the overall eligibility of the Project and the Project’s readiness to proceed. All Part I
submissions will be competitively evaluated against all others submitted during the corresponding round
of review. DOE will evaluate each Part I submission based upon the factors summarized in Attachment A
– Part I. Projects that do not meet the requirements set forth in this Solicitation will not receive any
further consideration.
Part II: The Part II submission may be filed at any time after DOE invites an Applicant to make a Part II
submission. The Part II submission consists of the items summarized in Attachment A – Part II as well as
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Loan Guarantee Solicitation Announcement
Advanced Fossil Energy Projects
other information that may be requested to facilitate DOE’s continued due diligence review. All Part II
submissions will be competitively evaluated against all others submitted during the corresponding round
of review. DOE shall have the right, in its sole discretion, to defer consideration of a Part II submission to
a later round, if one is available, and to terminate an incomplete Application after the final round.
Projects that do not meet the requirements set forth in this Solicitation will not receive any further
consideration.
B. Loan Guarantee Process Overview
The following table outlines the Application, approval, and post-selection process for obtaining a loan
guarantee under this Solicitation:
3
Stage
Party Responsible
Costs due from Applicant3
• Issue Solicitation
DOE
--
• Confirm Applicant eligibility
Applicant
--
• Fulfill Application requirements
Applicant
--
• File Part I submission
Applicant
$75,000 of Application Fee
• Review Part I and determine eligibility and
Project’s readiness to proceed
DOE
--
• Invite qualified Applicants to file Part II
submission
DOE
--
• File Part II submission
Applicant
$925,000 of Application Fee
• Review and evaluate Part II submissions
DOE
--
• Invite selected Applicants to continue due
diligence
DOE
--
• Continue due diligence of selected Applicants
DOE
Consulting and legal costs
• Negotiate Term Sheets with selected Applicants
DOE/Applicant
--
• Issue Conditional Commitment for loan
guarantee
DOE
25% of Facility Fee
• Negotiate transaction documents
DOE/Applicant
--
• Determine Credit Subsidy Cost
DOE
• Execute Loan Guarantee Agreement
DOE/Applicant
75% of Facility Fee
100 % of first annual
Please refer to Section VI for an explanation of all fees associated with submitting an Application under this Solicitation.
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Advanced Fossil Energy Projects
Maintenance Fee
100% of Credit Subsidy
Cost
C. Summary of Application Evaluation Process
DOE will review each Part I submission to determine whether or not such submission is responsive to the
requirements of this Solicitation. DOE’s Part I evaluation will place particular importance on verifying
that an Application meets the Project eligibility requirements set forth in II.A, specifically that the Project:
1. Qualifies as an Advanced Fossil Energy Technology in the technology areas described herein;
2. Avoids, reduces, or sequesters anthropogenic emission of greenhouse gases;
3. Employs New or Significantly Improved Technology as compared to Commercial Technology in
service in the United States;
4. Is located in the United States;
5. Provides a reasonable prospect of repayment of the principal and interest on the Guaranteed
Obligation and other Project debt;
6. Has sufficient funds to carry out the Project; and
7. Is not benefitting from other federal assistance as more fully described in II.A.
Applicants for Projects that, in DOE’s Part I evaluation, are deemed eligible and ready to proceed, will
then be invited to make a Part II submission. DOE will conduct a more detailed, weighted review of each
Part II submission based on the factors referred to in this Solicitation.
Section 609.7 of the Final Regulations sets forth information regarding programmatic, technical, and
financial evaluation of Applications. DOE will evaluate Applications based on the requirements of Title
XVII, the Final Regulations, and this Solicitation. In addition to the factors listed in Section 609.7(b) of
the Final Regulations, pursuant to Section 609.7(b)(16) of the Final Regulations DOE will consider such
other criteria that DOE deems relevant in evaluating the merits of an Application including, without
limitation, the following factors:
1. Whether the Project could be fully financed on a long-term basis by commercial banks,
institutional investors, or the capital markets without a federal loan guarantee;
2. Whether the Project has identified a dedicated and appropriate Project site. Generally, a Project
is restricted to one location within the United States. However, DOE may, in its discretion,
consider an Application for a Project using a particular technology that is proposed to be
situated in more than one location in the United States if multiple locations are integral
components of a unitary plan, necessary to the viability of the Project, and at least one of the
locations is identified in the Application;
3. The level of NEPA review required by DOE;
4. Whether the Guaranteed Obligation is expected to be senior-secured debt;
5. The best use of the loan guarantee (i.e., Applications that demonstrate the most efficient and
competitive uses of the loan guarantee);
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Advanced Fossil Energy Projects
6. The Project Sponsor’s experience in the development of Advanced Fossil Energy Projects
including experience in securing project financing, project due diligence, developing, designing,
equipping, building, interconnecting, contracting for the sale/purchase of energy, and
commissioning of the assets; and
7. The extent the Project uses partial guarantees and/or co-lenders. The use of partial guarantees
and/or co-lenders will be viewed favorably by DOE.
DOE will make decisions as to whether to continue due diligence on Projects competitively evaluated
during a given round of Part II reviews after the closing of such round. At any time following the closing
of any particular round of Part II submissions, DOE may select, for purposes of continuing due diligence,
underwriting, and negotiations, Applicants meeting the requirements of Title XVII as well as the
underwriting criteria for this Solicitation. During this period of review, communications from the
Applicant to DOE are generally not permitted with respect to an Application, except in instances when the
Applicant is required to respond to DOE’s written notification to such Applicant. Approval of an
Application for the purposes of continuing due diligence, underwriting, and negotiations is not an
assurance that DOE will offer a Conditional Commitment or a loan guarantee.
The term “due diligence” means the research and analysis that LPO conducts concerning a project for
which LPO is considering providing a loan guarantee. During the due diligence process, LPO confirms
all material facts regarding the project by, among other things, looking at various aspects relating to the
subject project, such as general company data, company financial information, corporate agreements,
relevant corporate and project legal documents, intellectual property rights, corporate insurance coverage,
corporate litigation history and documents, key personnel and their ability to perform the roles assigned to
them, environmental matters, corporate tax filings and documents, marketing information, internal
controls, information systems, and operational information. Such research and analysis may include
questions (among others) such as who will provide the funds, other than the DOE-guaranteed debt, for the
construction of the project; how will the project pay its operating expenses and repay its debt; which
parties are responsible for which risks; what experience does your construction contractor and operator
have on these types of projects; what permits are required to construct and operate the project and does the
project have such permits; and is it possible that there could be cost overruns under the construction
contract and, if so, who will pay for those cost overruns. In addition to information requested in this
Solicitation, each Applicant may also be required to submit additional information subsequently requested
by DOE in order to clarify an Application.
Mandatory criteria that DOE will use during each round of Part II reviews in determining which Project
Sponsors/Applicants will proceed to the next stage are (1) whether the Project provides a reasonable
prospect of repayment of the principal and interest on the Guaranteed Obligation and other Project debt,
and (2) whether the Guaranteed Obligation and other Project debt, when combined with amounts available
from other sources, will be sufficient to carry out the Project. If these mandatory requirements are not
validated in any given round of Part II reviews, such Application will not receive further consideration.
As required by Section 609.3(b) of the Final Regulations, DOE shall consider the following factors (the
“Initial Part II Factors”) in determining to make guarantees to Projects under this Solicitation: financial
factors, technical factors, and programmatic factors. Additionally, DOE intends to consider policy factors
(the “Policy Factors”) in determining to make guarantees to Projects under this Solicitation. After
evaluation of an Application based on the Initial Part II Factors, selected Applications will then be
evaluated against each other based on Policy Factors. Only Applications for Projects that are determined
to be highly qualified based on Policy Factors will continue with due diligence. An Application for a
Project that scores very highly on the Part II Initial Factors but does not score well on the Policy Factors
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will not be allowed to continue with due diligence. Applications for Projects that do not score well on the
Initial Part II Factors will not be part of the competition based on the Policy Factors.
The following table summarizes the relative weightings for each Initial Part II Factor:
Criteria
Weighting
Financial Factors: Creditworthiness
45%
Technical Factors: Technical relevance, merit, technical approach,
work plan, and construction plan
Programmatic Factors: Legal, environmental and regulatory
factors
TOTAL
35%
20%
100.0%
D. Review of Financial Factors (Weighting: _45%)
As part of its Part II review process, DOE will conduct a thorough review of all financial factors
associated with an Application. Among other considerations, the financial review will:
1.
Assess the creditworthiness of the Project:
a) The Project’s economic viability with and without the DOE loan guarantee, the availability
of other federal and state incentives other than the DOE loan guarantee, its ability to
generate sufficient cash flow to service the borrower’s debt obligations over the life of the
loan guarantee;
b) Each Project Sponsor’s financial commitment to the Project, financial strength, including its
ability to pay transaction costs arising out of the Project (e.g., fees and expenses for DOE’s
internal technical resources and its independent consultants and outside counsel) on a timely
basis, and the credibility of its business and financial plans; and
c) Overriding market factors that could significantly influence the success of the Project;
2.
Assess the financial viability of the Project, review the sources and uses of funds proposed by
the Applicant in the financial plans submitted with the Application, and review updates and
projections for future financial performance;
3.
Consider the Project Sponsor’s prior financial and managerial investment in the Project and its
capability to implement the Project as proposed;
4.
Consider the extent to which the Project uses partial guarantees and/or co-lenders; and
5.
Review all other financial factors DOE deems appropriate.
E. Review of Technical Factors (Weighting: _35%)
As part of the Part II technical review, DOE will rely on the quality and scope of the Application’s
technical submission, which shall include the technical elements found in Section 609.6 of the Final
Regulation and as supplemented in Section IVA and C herein. Among the considerations for DOE’s
technical review are:
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1.
Technical Relevance and Merit: DOE will evaluate the extent to which the Project will
enhance the use of advanced fossil energy technology on a national, state, regional, or local
basis, including:
a) the technical readiness of the proposed advanced fossil energy innovation for near-term
commercial application;
b) the projection for long-term applicability of the advanced fossil energy technology
proposed; and
c) the innovativeness of the technology application or proposed process when compared to
established commercial systems.
2.
Capabilities of the Project Team: DOE will evaluate the experience and abilities of the
Applicant and primary Project participants, including the:
a) relevance and depth of prior experience of the Applicant and primary key Project partners
in developing, constructing, and operating projects of similar size, scope and complexity;
competencies, strengths and experiences of key partners such as equipment suppliers,
engineering, architectural, and design agents or consultants, and vendors providing essential
support or services to the Project; and
b) whether the Project has obtained access to intellectual property needed to support the
Project including key technical components, processes, designs, feedstock, and catalysts
through licenses, procurements, or patents.
3.
Technical Approach/Work Plan: Projects will be evaluated based on the strength of the
Project management plans to be used to achieve the stated cost, schedule, and technical
performance objectives and milestones, including:
a) scope, maturity, and completeness of pre-construction systems analysis, design detail and
prototype testing, including the level and maturing of front end engineering and design;
b) relevance, scope, and maturity of the plans for Project execution and performance
measurement including integrated Project schedules;
c) progress implementing and executing these plans, including achievements attained to date;
and
d) relevance, scope, and maturity of Project risk management and mitigation plans.
4.
Construction Plan: DOE will evaluate the strength and completeness of the construction plan
for the Project, including:
a) progress in the development of the Project construction management approach, whether the
approach is through an engineering, procurement, and construction contract, or other
general contracting arrangements;
b) schedule and progress in securing contracts and services for Project execution including the
extent to which equipment, commodities, or services costs have been identified, negotiated,
and assigned and extent to which such costs are fixed or still variable; and
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c) whether necessary construction rights and federal, state and local permits have been
identified, obtained, approved, or scheduled.
F. Review of Programmatic Factors (Weighting: 20%)
1.
Legal Review (Weighting: 10%): As part of the Part II programmatic review, DOE will
review the Project’s legal structure and risks. This review may involve analysis of legal
documents among the parties, including equity owners, entities providing other forms of
financing, engineers and construction contractors, operation and maintenance contractors,
equipment suppliers, host communities, and any other counterparties of interest. DOE also will
analyze the intellectual property rights of all relevant parties in the Project. In addition, DOE
will evaluate the Project’s capacity to mitigate risk from potential legal and regulatory issues
that could jeopardize the success of the Project. Areas of review will include any pending or
threatened litigation involving the Project or any Project participant.
2.
Environmental Review (Weighting: 10%): As part of the Part II programmatic review, DOE
will evaluate the Project to determine the appropriate level of environmental review, including
the level of NEPA review required. The Applicant must provide enough information to enable
DOE to determine the scope of affected environmental aspects (biological, physical, and sociocultural resources affected) and the level of NEPA review that would be required if the
Applicant were selected to begin negotiations with DOE. More information on the NEPA
process and examples of environmental data that should be included in each Application may be
found in Attachment B.
G. Review of Policy Factors
DOE will evaluate the extent to which an Application for a Project that scores highly enough to continue
to the competition based on Policy Factors, achieves policy objectives.
1. Assess to what measurable extent the Project avoids, reduces, or sequesters anthropogenic
emissions of greenhouses gases;
2. Assess to what extent the New or Significantly Improved Technology to be employed in the
Project, as compared to Commercial Technology in general use in the United States, is ready to be
employed commercially in the United States, , yields a commercially viable project or service in
the use proposed in the Project, and is or will be available for further commercial use in the
United States;
3. Compare the percentage of guaranteed funds to total project costs relied upon by the Application
to the percentage of the guaranteed funds to total projects costs relied upon by other Applications,
with greater weight being given to Applications that rely upon a smaller percentage of guaranteed
funds;
4. Assess the extent to which the Applicant and the Project Sponsor are prepared to proceed to
Conditional Commitment and Closing with greater weight being given to Applications for which
the Applicant and the Project Sponsor are prepared to proceed more expeditiously than other
Applicants and Project Sponsors;
5. Assess the extent to which the New or Significantly Improved Technology to be employed in the
Project can be replicated, the benefits for the United States based of such replication, and the
extent to which successful deployment of the Project will accelerate the process of replication;
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6. Assess to what extent the New or Significantly Improved Technology used in the Project
constitutes an important improvement in technology, as compared to Commercial Technology,
used to avoid, reduce or sequester anthropogenic emissions of greenhouse gases, and the
Applicant has a plan to advance or assist in the advancement of that technology into the
commercial marketplace.
H. Review and Determination to Proceed
In reviewing completed Applications, and in prioritizing and selecting Projects for due diligence review,
DOE will apply the criteria set forth in Title XVII, the Final Regulations, and this Solicitation. For each
round of review, submissions will be considered in a competitive process (i.e., each submission will be
evaluated against all other submissions responsive to this Solicitation that are filed during the
corresponding round of review). DOE will consult with the Secretary of the Treasury regarding the terms
and conditions of a potential loan guarantee.
Pursuant to Section 609.7(d) of the Final Regulations, if DOE reviews a submission and decides not to
proceed, DOE will inform the Applicant in writing of the reason(s) for not moving forward. If at any time
after DOE invites an Applicant to file a Part II submission, DOE decides not to proceed further with due
diligence review or negotiation of a Term Sheet, DOE will inform the Applicant in writing of the
reason(s). The discontinuation of due diligence by DOE will not prejudice the Applicant from applying
for a loan guarantee pursuant to the terms of any existing Solicitation that is accepting Applications.
DOE’s decision not to proceed further with the issuance, due diligence review, or negotiation of a Term
Sheet shall be final and non-appealable.
I.
Notification
Selection of Projects for continued due diligence review will be made after the closing of each round of
Part II review. If DOE determines that a Project may be suitable for a loan guarantee, DOE will notify the
Applicant in writing, will continue its due diligence and, when appropriate, begin negotiating a Term
Sheet. There can be no assurance that any Project will be selected for continued due diligence review or
offered a Term Sheet.
J.
Government Right to Reject or Negotiate
DOE reserves the right, without qualification, to reject any or all Applications received in response to this
Solicitation or select any Application for negotiation of a Term Sheet.
V.
Application Schedule and Instructions
In order to encourage submissions of complete Applications as early as possible after the date of this
Solicitation, Part II submissions will be systematically reviewed on a continuous basis as soon as they are
received. However, final selection of qualified Applicants will not occur until after all Part II submissions are
competitively evaluated against all others submitted during the corresponding round of review.
A. Application Submission Schedule
The following are the Part I and Part II Application due dates:
Part I Due Dates
February 28, 2014
April 30, 2014
July 31, 2014
December 31, 2014
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Loan Guarantee Solicitation Announcement
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May 31, 2015
October 31, 2015
Part II Due Dates
May 31, 2014
August 31, 2014
November 30, 2014
April 30, 2015
September 30, 2015
February 28, 2016
Additional rounds may be announced in a supplement to this Solicitation.
B. Electronic Application Submissions
Applicants must file Part I and Part II submissions in electronic form via the DOE Loan Program’s online
Application portal (“Application Portal”). Supporting documents for Applications will be accepted only
in the following formats: Microsoft Excel or Adobe PDF. Do not encrypt, compress, or zip any files. For
an Application to be considered under this Solicitation:
•
Part I must be submitted electronically no later than 11:59 pm Eastern Time, on the due date for
the respective Part I round of review.
•
To be considered for a particular Part II round of review, Applicants must file their Part II
submission no later than 11:59 pm Eastern Time on the corresponding due date for that round of
Part II submissions.
1.
Application Portal Submission Process:
a) Applicants may access the Application Portal from the Program Website,
http://loanprograms.energy.gov. The information requested in Part I Section A is to be
entered directly into the text fields provided in the Application Portal. The information
requested in Part I Sections B through H and in Part II is to be provided on PDF or Excel
documents uploaded through the Application Portal. Uploaded documents must indicate
clearly the section and subsection of the Part I or Part II requirement to which the
information on the documents pertains.
b) The Application Portal provides a process for making corrections to an Application if an
Application requires substantive changes or additions after it has been submitted and prior
to a submission deadline.
c) DOE will calculate the time of delivery for Part I or Part II of an Application as provided by
the time stamp for such submission as given by the Application Portal.
d) Prior to the applicable due date and time for the Part I and Part II submissions, it is the
responsibility of the Applicant to verify that each submission was successfully transmitted
and that DOE has received each such submission. This may be done by printing the
confirmation page provided to the Applicant from the Application Portal.
C. Registrations
To apply electronically via the Application Portal, Applicants must complete the following:
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Loan Guarantee Solicitation Announcement
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1.
obtain a Dun and Bradstreet Data Universal Numbering System (“DUNS”) number (plus 4 digit
extension if applicable);
2.
obtain a North American Industry Classification System (“NAICS”) code; and
3.
register with the System for Award Management (“SAM”).
If you do not know or do not have a DUNS number, you can search for it or request one at:
http://fedgov.dnb.com/webform/displayHomePage.do.
If you do not know or do not have a NAICS code, you can search for it or request one at:
http://www.census.gov/eos/www/naics/.
If you are not registered with SAM, register at https://www.sam.gov/portal/public/SAM/. The SAM
registration must be completed and active before a payment can be made.
D. Additional Application Submission Media
1.
In addition to, but not in lieu of, completing the Application using the Application Portal,
Applicants may also submit the Application via CD-Rom:
a) Part I on no more than two (2) CDs; and
b) Part II on no more than two (2) CDs.
All non-electronic submissions should be sent to the address listed below. Such media should arrive by
express mail no later than two (2) business days after the due date for the corresponding Part I or Part II
submission.
U.S. Department of Energy, Loan Programs Office
Attn: Advanced Fossil Energy Applications
1000 Independence Avenue, SW
Washington, DC 20585
E. Formatting Instructions
Applicants must provide all requested information in the following format:
1.
Documents supporting and forming any part of an Application must:
a) Be typed in Times New Roman 11 point font;
b) Use single-spaced paragraphs;
c) Adhere to a format consisting of standard 8.5” x 11” paper; and
d) Have 1” margins (top, bottom, left and right) with exceptions for charts, graphics, and
similar materials.
2.
Applicants should provide a “short name” or other identifier that will allow for easy
identification of the Project.
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3.
The file naming standard that DOE will use for uploaded files is specified in Table 1. Certain
documents uploaded through the Application Portal will be renamed automatically to conform
to this convention, as shown in the example that follows Table 1.
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Table 1
Order
#
File Name Identifier
Identifier Specified as
Following
separator
1
Project Name
Project Name
Period
2
Part I or Part II
Submission Indicator
Roman numeral
Period
3
Category Character
Reference
Capital letter identifier for the section in the Solicitation
specifying the document category
Period
4
Category name
Name of the section in the Solicitation specifying the
document category
Period
5
Sub-category
Number(s)
Number identifier for the sub-section in the Solicitation
specifying the document sub-category.
Period
If multiple sub-categories apply, list the sub-categories as
a comma-separated list in ascending numeric order.
6
Version Number
Capital ‘V’ followed by the next consecutive version
number in the system. The first version of any document
is specified as 1.
Period
7
File Extension
File extension representing the file type
NONE
Example:
1. Project
Name
5. SubCategory
Number(s)
3.Category
Character
Reference
7. File
Extension
ProjectABC.I.D.Technical
Information.1,2,3,4,5,6,7,8.V1.pdf
2.Submission
Indicator
4. Category
Name
6. Version
Number
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F. Multiple Applications
Applicants may apply more than once under this Solicitation, but a Project Sponsor or Applicant may only
submit one Application for a Project using a particular technology. A Project Sponsor or Applicant, in
other words, may not submit an Application for multiple Projects using the same technology.
G. Required Certification
The following certification must be included with each Application:
“The undersigned certifies that the data and information submitted and the representations made in this
Application and any attachments to this Application are true and correct, to the best of the Applicant’s
knowledge and belief after due diligence, and that the Applicant has not omitted any material facts.
The undersigned further certifies to having full authority to bind the Applicant.
_________________________________________
Applicant (Organization Name)
_________________________________________
Name of Applicant’s Authorized Officer
(will fulfill on-line certification)
_________________________________________
Signature of Authorized Officer
(for paper copy only)
_________________________________________
Title of Authorized Officer
_________________________________________
Date”
VI.
Fees, Costs, and Expenses
A. Fees
Certain fees are required as part of a complete Application. These fees defray the administrative costs
associated with DOE conducting its internal technical and financial review of the Project. Section
1702(h) of Title XVII requires DOE to “charge and collect fees for guarantees in the amounts the
Secretary determines are sufficient to cover applicable administrative expenses” of the Loan Guarantee
Program. Section IV.B specifies each stage of the loan guarantee process at which Applicants must pay
the Administrative Cost of Issuing a Loan Guarantee. Non-refundable fees due to DOE during the course
of the Application and loan guarantee process must be paid directly to Treasury and are specified below:
1.
Application Fee: Applicants must pay a non-refundable Application fee (the “Application
Fee”) in the amount of $1,000,000. The Application Fee will be payable as follows:
a) Seventy-five Thousand Dollars ($75,000) must be paid on or prior to the date on which an
Applicant submits Part I of its Application. This first payment must be wired to Treasury
no later than 11:59 pm Eastern Time on the due date for the Applicant’s desired round of
Part I submissions.
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b) Nine Hundred Twenty-five Thousand Dollars ($925,000) must be paid on or prior to the
date on which an Applicant submits Part II of its Application. This second payment must
be wired to Treasury no later than 11:59 pm Eastern Time on the due date for the
Applicant’s desired round of Part II submissions.
2.
Facility Fee: Applicants must pay a non-refundable facility fee (the “Facility Fee”) in an
amount equal to 1/2 of 1.0% of the principal amount of the Guaranteed Obligation. The Facility
Fee will be payable as follows:
a) Twenty-five percent (25.0%) of the Facility Fee must be paid on or prior to the date on
which the Applicant executes the DOE-approved Term Sheet.
b) Seventy-five percent (75.0%) of the Facility Fee must be paid prior to the financial closing
date for the Loan Guarantee Agreement.
3.
Maintenance Fee: Applicants must pay a non-refundable annual maintenance fee (the
“Maintenance Fee”) to cover DOE’s administrative expenses, other than Extraordinary
Expenses, in servicing and monitoring the Loan Guarantee Agreement from the execution of the
Loan Guarantee Agreement by the Borrower through payment in full of the Guaranteed
Obligation in connection with such Loan Guarantee Agreement. The amount of the
Maintenance Fee is expected to be $500,000 per calendar year. The Maintenance Fee shall be
paid each year in advance, commencing with payment of a pro-rated annual payment prior to
the financial closing date of the Loan Guarantee Agreement, on or prior to the date and in the
amount specified in the Loan Guarantee Agreement.
4.
Treasury Wiring Instructions: Application Fees, Facility Fees, and Maintenance Fees will
only be credited by wire transfers to the following address:
U.S. Department of the Treasury
ABA No. 0210-3000-4 TREASNYC/CTR/BNF=D89000001
OBI=LPO – Advanced Fossil Energy Solicitation [Application] [Facility]
[Maintenance] Fee for (Applicant name)
No funds for the payment of these fees may be obtained from the federal government or from a loan or
other debt obligation guaranteed by the federal government.
B. Loan Guarantee Credit Subsidy Cost
The Credit Subsidy Cost is the net present value of the estimated long-term cost to the U.S. government of
a loan guarantee as determined under the applicable provisions of the Federal Credit Reform Act of 1990,
as amended (“FCRA”). Section 1702(b) of Title XVII provides that no guarantee shall be made unless
(1) an appropriation for the cost of the guarantee has been made, (2) the Secretary has received from the
Borrower a payment in full for the cost of the guarantee and deposited the payment into the Treasury, or
(3) a combination of one or more appropriations under (1) and one or more payments from the Borrower
under (2) has been made that is sufficient to cover the cost of the guarantee. DOE does not expect to
request or receive appropriated amounts from Congress to cover the Credit Subsidy Costs associated with
the potential loan guarantees issued under this Solicitation. Therefore, DOE anticipates that the Project(s)
approved pursuant to this Solicitation will require the Applicant to directly pay the non-refundable Credit
Subsidy Cost prior to, or at the time of, closing. The Applicant may not finance the payment of the Credit
Subsidy Cost through funds obtained from the federal government or through a loan made or guaranteed
by the federal government, unless otherwise explicitly authorized by Congress. In accordance with FCRA
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and this Solicitation, DOE must consult with OMB and obtain approval for DOE’s calculation of the
Credit Subsidy Cost for each proposed loan guarantee prior to issuing any loan guarantee.
C. Independent Consultants and Outside Counsel to DOE
Each Applicant shall be responsible for paying the fees and expenses incurred by DOE’s independent
consultants and outside legal counsel in connection with such Applicant’s Project under all circumstances.
Upon making the determination to engage independent consultants or outside counsel with respect to an
Application, DOE will proceed in evaluating and processing an Application only upon a Project Sponsor’s
entering into an agreement satisfactory to DOE agreeing to pay the fees and expenses of the applicable
independent consultant and/or outside counsel. Applicants are advised that such services shall be
rendered for the benefit of DOE in connection with an Applicant’s Project and that DOE, not the Project
Sponsor, is the client of such independent consultants and outside counsel. In some cases, a retainer to
cover such fees and expenses may be required. In the event that a Project Sponsor fails to comply with
the provisions of such payment agreement, DOE may stop work on the Application and/or reject an
Application.
DOE shall not be financially liable to any independent consultant or outside counsel for services rendered
in connection with an Application under any circumstances whatsoever.
D. Extraordinary Expenses
In the event that a Project experiences difficulty relating to technical, financial, or legal matters or other
events (e.g., engineering failure or financial workouts) which require DOE to incur time or expenses
beyond standard monitoring (“Extraordinary Expenses”), DOE will be entitled to payment in full from
the Borrower of additional fees in an amount determined by DOE and of related fees and expenses of its
independent consultants and outside counsel, to the extent that such fees and expenses are incurred
directly by DOE and to the extent such third parties are not paid directly by the Borrower or Project
Sponsor. In accordance with Section 1702(h) of Title XVII, DOE may charge the Applicant/Borrower
additional fees to cover DOE’s Extraordinary Expenses.
VII. Additional Provisions
A. Commitment of Public Funds
DOE shall not be bound by oral representations made during the Application stage or during any
negotiations. No binding commitment, agreement, obligation, or right of any kind may be assumed or
enforced by any Applicant or Project Sponsor against DOE other than in accordance with a duly and
validly executed Loan Guarantee Agreement.
B. Procurement or Financial Assistance Award
Neither a procurement action under Title 48 of the CFR nor a financial assistance award under 10 CFR
Part 600 is contemplated by this Solicitation.
C. Warning
It is a crime to knowingly make false statements to a federal agency. Misrepresentation of material facts
may be the basis for denial of an Application for a loan guarantee from DOE. Penalties upon conviction
may include fine and imprisonment. For details, please refer to 18 U.S.C. §1001.
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D. Restrictions on Disclosure and Use of Information
Title XVII authorizes the collection of the information requested in this Solicitation. This information
will aid DOE in its review of Applications for loan guarantees pursuant to Title XVII. Disclosure of this
information may be made as required by law, including the Freedom of Information Act, 5 U.S.C. §552
(“FOIA”).
Patentable ideas, trade secrets, proprietary and confidential commercial or financial information,
disclosure of which may harm the Applicant, should be included in an Application only to the extent that
such information is necessary to convey an understanding of the Project. The use and disclosure of such
data may be restricted, provided the Applicant specifically identifies and marks such data in accordance
with 10 CFR 600.15 described below:
1.
Upload the following legend on a separate page in response to Section B of Part I and/or
Section A of Part II of the Application, respectively (be sure to specify the section number(s)
from the Application that contain(s) such data):
“Applicant hereby certifies that Section(s) [___] of this Application may contain trade secrets or
commercial or financial information that is privileged or confidential and is exempt from public
disclosure. Such information shall be used or disclosed only for evaluation purposes or in
accordance the loan guarantee agreement, if any, entered in response to this Application. If this
Applicant is issued a loan guarantee under Title XVII of the Energy Policy Act of 2005, as
amended, as a result of, or in connection with, the submission of this Application, DOE shall
have the right to use or disclose the data contained herein, other than such data that have been
properly declared in the loan guarantee agreement to be trade secrets or commercial or financial
information that is privileged or confidential and is exempt from public disclosure.”
2.
Include the following legend on the first or cover page of each document or electronic file
submitted that contains such data (be sure to specify the page numbers from such document or
electronic file that contains such data):
“Notice of Restriction on Disclosure and Use of Data
Pages [___] of this document may contain trade secrets or commercial or financial information
that is privileged or confidential and is exempt from public disclosure. Such information shall
be used or disclosed only for evaluation purposes or in accordance with a financial assistance or
loan agreement between the submitter and the Government. The Government may use or
disclose any information that is not appropriately marked or otherwise restricted, regardless of
source.”
3.
Include the following legend on each page containing trade secrets or commercial or financial
information that is privileged or confidential:
“May contain trade secrets or commercial or financial information that is privileged or
confidential and exempt from public disclosure.”
4.
In addition, each line or paragraph containing trade secrets or commercial or financial
information that is privileged or confidential must be marked with brackets or other clear
identification, such as highlighting.
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E. Burden Disclosure Statement
This data is being collected to support Applications for loan guarantees from the Department of Energy
under Title XVII of the Energy Policy Act of 2005, as amended (42 U.S.C. §16511, et seq.). The data you
supply will be used for the review of Applications for loan guarantees under Title XVII.
Public reporting burden for this collection of information is estimated to average 130 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining
the data needed, and completing and reviewing the collection of information. Send comments regarding
this burden estimate or any other aspect of this collection of information, including suggestions for
reducing this burden, to the Office of the Chief Information Officer, Records Management Division, IM23, U.S. Department of Energy, 1000 Independence Ave SW, Washington, DC, 20585-1290; and to the
Office of Management and Budget, OIRA, Washington, DC 20503.
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person
be subject to a penalty for failure to comply with, a collection of information subject to the requirements
of the Paperwork Reduction Act unless that collection of information displays a currently valid OMB
control number. The OMB Control Number for this collection of information is 1910-5134. The OMB
expiration date for this collection of information is 11/30/2016.
Submission of this data is required to obtain a guarantee of the repayment of principal and interest on
loans relating to Projects that qualify for such guarantees under Title XVII of the Energy Policy Act of
2005 (42 U.S.C. §16511, et seq.).
F. Questions
The name and address of the DOE representative whom a potential Project Sponsor may contact to
receive a copy of this Solicitation is:
Dan Tobin
U.S. Department of Energy, Loan Programs Office
Attn: Advanced Fossil Energy Applications
1000 Independence Avenue, SW
Washington, DC 20585
You may send questions to [email protected] . DOE will respond to
questions as appropriate. No specific Projects or potential Applications will be discussed or otherwise
addressed. All questions and responses may be made public on LPO’s website or elsewhere. Please
include “RE: Advanced Fossil Energy Question -” and a few words describing the question in the subject
line. If DOE decides to begin negotiations with an Applicant, DOE will assign a single point of contact
for all subsequent questions and/or discussions on matters relevant to the corresponding Application.
VIII. References
The Program Website is located at http://loanprograms.energy.gov. Statutes and regulations for which a link is
not provided below may be found at the Program Website.
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This Solicitation was developed pursuant to the following statutes and regulations:
A. Energy Policy Act of 2005, 42 U.S.C. §§16511-16516 (August 8, 2005), as amended
B. 10 CFR Part 609 Loan Guarantees for Projects That Employ Innovative Technologies (December 4,
2009)
C. Omnibus Appropriations Act, 2009, P.L. No. 111-8, Division C, Title III
(http://www.gpo.gov/fdsys/pkg/PLAW-111publ8/html/PLAW-111publ8.htm), as amended by
Section 408 of the Supplemental Appropriations Act, 2009, P.L. No. 111-32
(http://www.gpo.gov/fdsys/pkg/PLAW-111publ32/html/PLAW-111publ32.htm)
D. Davis-Bacon Act and related acts located at http://www.dol.gov/whd/govcontracts/dbra.htm
E. OMB Circulars No. A-11 and A-129, http://www.whitehouse.gov/omb/circulars_a129_rev2013 and
the OMB website, http://www.whitehouse.gov/omb/memoranda_default/
F. Council for Environmental Quality (CEQ) Regulations at 40 CFR 1500-1508 located at:
http://ceq.hss.doe.gov/nepa/regs/ceq/1500.htm#1500.5
G. CEQ Guidance, “Forty Most Asked Questions Concerning CEQ’s NEPA Regulations,” Question No.
11 (March 23, 1981) located at http://ceq.hss.doe.gov/nepa/regs/40/11-19.HTM#11
H. Freedom of Information Act, 5 U.S.C.§552; located at http://www.foia.gov/index.html
(Remainder of this page intentionally left blank.)
23
ATTACHMENT A – PART I SUBMISSION
The Application is divided into a Part I submission and a Part II submission. Part I of the Application
provides DOE with a description of the Project, technical information, expected environmental effects,
background information on management, financing strategy, and progress to date of critical path
schedules. This information will be used as a basis for determining the overall eligibility of the Project
and the Project’s readiness to proceed. DOE will evaluate each Part I submission based upon the factors
summarized herein, however, DOE may require that Applicants provide additional certifications or
supporting documentation as part of the Project evaluation process. If an Applicant is invited to submit a
Part II submission, to the extent that there are any material deviations from the information provided to
DOE in the Part I submission, the Applicant must update the information.
The information requested in Part I Section A is to be entered directly into the text fields provided in the
Application Portal. The information requested in Part I Sections B through H is to be provided on PDF or
Excel documents uploaded through the Application Portal. Uploaded documents must indicate clearly
the section and subsection of the Part I requirement to which the information on the documents
pertains.
I. Part I Submission
A. Application Information
1.
Project Information: Enter the Project name, select the applicable technology category
or categories (Advanced Resource Development, Carbon Capture, Low-Carbon Power
Systems, Efficiency Improvement, Other), and enter the Project/generation capacity (in
Megawatts, Gallons per Year, Tons per Year, or Other).
2.
Project Location: Enter the following information regarding one or more Project
locations: address, city, state, zip code.
3.
Project Sponsor(s): Enter the following information for each Project Sponsor with
equity of five percent (5.0%) or more: indicate whether lead sponsor (must have one lead
sponsor), entity name, website address, mailing address, city state, postal code, contact
first name, contact last name, contact title/position, contact phone, and contact email.
4.
Applicant Information: Enter the following information for the Applicant: Applicant
entity name, website address, mailing address, city, state, postal code, DUNS number,
NAICS code, primary contact information including first name, last name, title/position,
phone, and email.
5.
Preliminary Questions: Answer the following questions. If the answer to any of these
questions is “No” include a detailed explanation of the circumstances that cause the
answer to be “No” in the space provided.
a) Do you confirm you have read and understand the Loan Guarantee Solicitation
Announcement from the U.S. Department of Energy Loan Programs Office regarding
Federal Loan Guarantees for Advanced Fossil Energy Projects?
Attachment A – Part I Submission
24
b) Is the Applicant legally authorized to enter into loan guarantee transactions and in
good standing with the U.S. Department of Energy and/or any other federal agency
loan guarantee program?
c) Is the Applicant current on payment of all amounts owed to the federal government?
d) Will the Project be built and operated entirely within the United States or its
territories?
e) Do you confirm that to the best of the Applicant’s knowledge, after making diligent
inquiry, that no Project participant has been charged with or convicted of a
misdemeanor or felony (other than routine traffic violations) or been involved in any
securities litigation?
6.
Summary of Loan Guarantee Request: Enter the following information regarding the
Applicant’s loan guarantee request: requested period of guarantee (years), total Project
Costs, proposed guarantee amount, debt, and equity. The sum of the amount entered for
debt and the amount entered for equity should equal the amount entered for total Project
Costs. The amount entered for the proposed guarantee amount should not be more than
the amount entered for debt. On the basis of the above entered amounts, calculations will
be made to determine the following amounts: debt to equity ratio, proposed guarantee
amount to debt percentage, and proposed guarantee amount to total Project Costs
percentage.
B. Option to Restrict Disclosure and Use of Certain Data
Section VII.D of the Solicitation sets forth the steps an Applicant must take in order to restrict
the use and disclosure of certain data submitted in the Application. In order to restrict the use
and disclosure of certain data submitted in Part I of the Application the Applicant must upload
a separate page containing the legend set forth in Section VII.D.1 of the Solicitation. If the
Applicant does not want to restrict the use and disclosure of any data submitted in the
Application the Applicant must upload a separate page containing the following statement:
“Applicant does not identify any data the use and disclosure of which is to be restricted.”
C. Organization (Corporate and Personnel)
1.
Organizational Chart: Provide a current corporate organizational chart showing the
Applicant’s relationship to any subsidiaries, affiliates, parent organizations, or joint
ventures associated with the Project. Show the Applicant’s relationship to each Principal.
For the purpose of this Solicitation, a “Principal” is any person who owns or will own
five or more percent of the Project.
2.
Key Staff: List the full names (including middle name or initial) of key staff to be
involved with the Project.
3.
Evidence of Authority: Submit evidence that the signatory of the Application has
authority to bind the Project Sponsor to the commitments and representations made in the
Application and attests as to the accuracy of the information provided in the Application
process.
Attachment A – Part I Submission
25
D. Project Description
1.
Executive Summary: Provide a description of the nature and scope of the Project,
including the technology, site, environmental resources affected, purpose, size, capacity,
design features, key metrics, and key milestones. Describe the commercial feasibility of
the technology(ies) and how you intend to employ such technology(ies) in the Project and
how you assure, to the extent possible, the further commercial availability of the
technology(ies) in the United States. Include target dates for:
a) financial close of the Loan Guarantee Agreement;
b) commencement of site preparation and construction;
c) commercial operation; and
d) marketing the output.
2.
Project Eligibility: Provide a detailed explanation of how and to what extent the Project
will qualify as an Eligible Project. DOE will base its determination that the Project is an
Eligible Project on the information the Applicant furnishes in its Part I submission.
Applicants are encouraged to be thorough in their explanations of a Project’s
qualification as an Eligible Project, including a discussion of the threshold determinations
set forth in Section 609.7(a) of the Final Regulations, all of the eligibility requirements of
Title XVII of the Final Regulations, and all of the eligibility requirements listed in
Section II of the Solicitation, “Eligibility Information”.
3.
Project Sponsors’ and Principals’ Capabilities: Describe each Project Sponsor’s and
each Principal’s capabilities, financial strengths, investment in the venture to date and as
anticipated during the construction and operation phases of the venture (i.e., continuing
financial support) and proposed equity investment in the Project, as well as the Project’s
strategic significance to each Project Sponsor and Principal.
4.
Prior Experience: Summarize the prior experience of each venture participant as it
relates to carrying out undertakings similar to the one being proposed. Include a detailed
description of current and previous experience in the fossil sector. Applicants must, at a
minimum, describe (a) examples of at least two projects in the fossil energy sector similar
in nature and scope (whether innovative or not) to the Project being proposed that have
been completed (developed, financed, and managed construction) by the Applicant’s
organization or its Principals, and (b) examples of at least two projects in the fossil
energy sector for which the Applicant’s organization or Principals raised equity and
secured debt for project financing, and (c) examples of at least two projects in the fossil
energy sector for which the Applicant’s organization was responsible for managing the
operations and maintenance of a project for a minimum of two years. Each project
example must be a project for which construction has been completed. Applicants that
are not able to include examples of two projects in their description of current and
previous experience in the fossil sector should provide a detailed description of the facts
that they believe are sufficient to demonstrate to DOE that they have the expertise that
would be evidenced in current or previous experience in the fossil sector by examples of
two projects. DOE will determine, in its sole and final judgment, whether the experience
described shows sufficient expertise.
Attachment A – Part I Submission
26
5.
Project Costs: Provide the estimated total Project Costs, as defined in Sections 609.2
and 609.12 of the Final Regulations, and a summary detailing key assumptions and the
methodology used to calculate the Project Costs. Include all eligible costs that you have
paid and expect to pay and that are directly related to the Project. Also include costs for
escalation and contingencies in this calculation. Distinguish between eligible and
ineligible Project Costs as set forth in Section 609.12 of the Final Regulations.
6.
Letters of Interest: Provide a letter of interest for all parties named in Section I.A.
E. Technical Information
Provide a top-level technical Project description, including the design, engineering,
construction, and operations and maintenance phases of the Project, including:
1.
Description of Project Design: A description of the basic processes involved in the
Project design.
2.
Description of New or Significantly Improved Technology: A detailed description of
the New or Significantly Improved Technology to be used in the Project, and a
description of how and why the technology is new or significantly improved compared to
technology already in general use in the commercial marketplace in the United States.
3.
Sketches: Conceptual level sketches and details outlining general plant layout, process
and materials flows, and operating parameters and throughputs for key processes.
4.
Critical Path Agreements Status: The status of critical path contracts and agreements,
such as a Front-end engineering agreement, technology license and teaming agreements,
Engineering, Procurement and Construction (“EPC”) contract, long-lead contracts,
feedstock agreements, and plant off-take or sales agreements.
5.
Planning Documents: Key planning documents for the Project such as the construction
plan, operation and maintenance plan, waste disposal plan, and preliminary risk
management plan.
6.
Acquisition Strategies:
acquisition strategies.
7.
Attachment C: A completed copy of Attachment C, Summary Lifecycle GHG
Emissions Data Worksheet.
Raw material, equipment, and component supply chain
F. Legal and Regulatory Information
1.
Timelines for Regulatory Approval:
regulatory approvals.
Provide timelines for receipt of all required
2.
Status of Required Permits, etc.: Provide the status of any required federal, state, or
local environmental permits, approvals, or reviews.
3.
Pending Investigations: Provide a summary of any pending or threatened (in writing)
action, suit, proceeding, or investigation by a governmental authority, of any kind,
including any action or proceeding by or before any governmental authority, that relates
Attachment A – Part I Submission
27
to the Project or to the Applicant, any Project Sponsor, any Principal, or the anticipated
Borrower, and the status of any appeals.
G. Business and Financial Plans
1.
Business Plan: Provide a description of the following elements of the Applicant’s
business plan for the Project:
a) Market analysis;
b) Feedstock (if applicable);
c) Off-take or sales agreements; and
d) Estimate of the number of construction jobs and permanent jobs expected to be
created or retained in the United States if the Project were to proceed as proposed in
the Application.
2.
Financial Plan: Provide a description of the following elements of the Applicant’s
proposed financial plan for the Project:
a) The term sheet for the Guaranteed Obligation;
b) The amount of expected equity investments (identify participants and level of
participation, if applicable);
c) The preliminary funding plan for the Guaranteed Obligation, including the total
amount for (i) working capital financing, (ii) medium-term financing for machinery
and equipment and (iii) longer-term financing for the site and facility;
d) The timing of expected equity contributions and debt funding;
e) The timing of repayment of expected debt funding;
f) Whether the Project will benefit directly or indirectly from certain other forms of
federal support, such as grants or other loan guarantees from federal agencies or
entities, including DOE, federal agencies or entities as a customer or off-taker of the
Project’s products or services, or other federal contracts, including acquisitions,
leases and other arrangements, that support the Project; and
g) Other non-federal governmental (including state) incentives or other assistance on
which the Project relies, including grants, tax credits and other loan guarantees to
support the financing, construction and operation of the Project. Indicate whether
any such incentives or assistance are subject to clawback and the circumstances
under which a clawback could occur.
H. Application Certifications
1.
Lobbying, Debarment, and Related Certifications and Assurances: In submitting an
Application for a loan guarantee under Title XVII, Applicants must provide certain
certifications and assurances contained in the form entitled “Certifications for Use with
Applications for Department of Energy Loan Guarantees under title XVII of the Energy
Attachment A – Part I Submission
28
Policy Act of 2005” which form may be downloaded from the Program Website:
http://energy.gov/sites/prod/files/Certifications%20for%20Use%20with%20Doe%20Loa
n%20Guarantees.pdf
2.
Applicant Validation Statement: Provide a written statement that, based on the Project
information provided by the Applicant, the Applicant attests that there is a reasonable
prospect that the guaranteed portion of the Guaranteed Obligation and any other Project
debt will be repaid on time and in full (including interest) from Project cash flow
according to the terms proposed in the Application.
3.
Letter of Commitment: For an Application to be considered under this Solicitation, Part
I must include a letter of commitment signed by an authorized representative of the
Applicant in the form set forth on the final page of Attachment A – Part I Submission.
4.
Penalty of Perjury Statement: The following certification must be included with each
Application:
“The undersigned certifies that the data and information submitted and the
representations made in this Application and any attachments to this Application are true
and correct, to the best of the Applicant’s knowledge and belief after due diligence, and
the Applicant has not omitted any material facts. The undersigned further certifies to
having full authority to bind the Applicant.
_________________________________
Applicant (Organization Name)
_________________________________
Name of Applicant’s Authorized Officer
(will fulfill on-line certification)
_________________________________
Signature of Authorized Officer
(for paper copy only)
_________________________________
Title of Authorized Officer
Applicant (Organization Name)
_________________________________
Date”
Attachment A – Part I Submission
29
[SAMPLE LETTER OF COMMITMENT]
[DATE]
Executive Director
U.S. Department of Energy, Loan Programs Office
Attn: Advanced Fossil Energy Applications
1000 Independence Avenue, SW
Washington, DC 20585
Dear Director:
This letter confirms our intent to seek a loan guarantee pursuant to Solicitation No. DE-SOL-0006303,
dated December 12, 2013 (the “Solicitation”). We have met all mandatory requirements as specified in
the Solicitation including all attachments. Our Part I submission Application Fee was wired as per your
instructions on xx/xx/201_.
We intend to submit our complete Part II submission on or before the due date for the [specify round by
number and/or Part II submission due date] round of Part II reviews as set forth in Section IV.A of the
Solicitation. Based on the Application process described in the Solicitation, we are prepared to close the
financing on or about xx/xx/201_.
If we decide to withdraw from consideration for a loan guarantee at any time, we will notify DOE in
writing of that decision as soon as possible.
Sincerely,
_______________________________
Signature of Authorized Officer
[Name]
Attachment A – Part I Submission
30
ATTACHMENT A – PART II SUBMISSION
Subject to the due dates set forth in Section V.A of the Solicitation, the Part II submission may be filed at any
time after DOE invites an Applicant to submit its Part II submission. The Part II submission consists of the items
summarized herein and in Attachment B as well as other information that may be requested to facilitate DOE’s
continued due diligence review. Projects eliminated by any of the requirements set forth in Part II of this
Attachment A will not receive any further consideration.
At any time after delivery of a Part II submission, to the extent that there are any material deviations from the
information provided to DOE in such Part II submission, the Applicant must promptly notify DOE no later than
three (3) business days after becoming aware of any such change by requesting approval from DOE to update
their Part II submission via the Application Portal. Upon DOE notice to Applicant of approval to re-open
Applicant’s Application, Applicant must provide DOE with updated information via the Application Portal no
later than ten (10) business days after receiving such notice from DOE.
Responses are to be provided on PDF or Excel documents uploaded through the Application Portal. Uploaded
documents must indicate clearly the section and subsection of the Part II requirement to which the
information on the documents pertains.
I.
Part II Submission
A. Option to Restrict Disclosure and Use of Certain Data
Section VII.D of the Solicitation sets forth the steps an Applicant must take in order to restrict the use
and disclosure of certain data submitted in the Application. In order to restrict the use and disclosure of
certain data submitted in Part II of the Application the Applicant must upload a separate page
containing the legend set forth in Section VII.D.1 of the Solicitation. If the Applicant does not want to
restrict the use and disclosure of any data submitted in the Application the Applicant must upload a
separate page containing the following statement: “Applicant does not identify any data the use and
disclosure of which is to be restricted.”
B. Updates, Changes, and Additions to Part I Submission
Update the information in the Part I submission to the extent and information in the Part I submission
has changed from the information previously submitted. Provide a detailed description of all material
amendments, modifications, and additions to the information provided in Part I of the Application,
including any changes in the Project’s financing structure or other terms, the rationale for such changes
and the expected impact on the Project. Provide any and all updated audited financial statements since
the submission of Part I of the Applicant and Project Sponsors (including new parties joining the
Project since the Part I submission).
C. Submission Index
Provide an index of all of the requirements contained in this Solicitation and in Section 609.6 of the
Final Regulations and where in your Application submissions, including Parts I and II, these
requirements are addressed.
D. Project Description
1.
Detailed Total Cost: Provide a detailed estimate of Project Costs in accordance with generally
accepted accounting principles and practices. Include a breakdown by cost category, year of
Attachment A – Part II Submission
31
expenditure and basis for amounts, and include a description of the methodology and key
assumptions used to make each estimate. Also include costs for escalation and contingencies, and
indicate whether each cost is firm or subject to change. Distinguish between eligible and
ineligible Project Costs as set forth in Section 609.12 of the Final Regulations.
2.
State and Local Support: Describe the status of potential and actual forms, amounts, and
conditions of state and local support for the Project. Provide timelines for such assistance.
3.
Project Location: Identify the proposed location in the United States and the rationale for the
site location. An Applicant proposing more than one location for a Project must set forth in its
Application its justification for siting the Project in more than one domestic location.
4.
Effect on Anthropogenic Emissions: Describe how and to what measurable extent the Project
avoids, reduces, or sequesters anthropogenic emissions of greenhouse gases, including how to
measure and verify those benefits.
E. Technical Information
1.
Key Contracts and Agreements: Provide a top-level description, schedule, current status, and
drafts or executed copies of all critical path contracts and agreements relevant to the investment,
design, engineering, financing, construction, startup, commissioning, shakedown, operation, and
maintenance of the Project, including:
a) EPC contract(s);
b) Long-term contracts for materials, components and equipment to be used in the Project;
c) Any leases, operating, or maintenance contracts; and
d) Any additional relevant agreements or commitments.
If drafts or executed copies of any of the foregoing contracts and agreements are unavailable,
provide a detailed description of such contracts and agreements, including all key terms and
counterparties, and indicate when copies of such contracts and agreements will be available.
2.
Engineering and Construction Plans: A detailed description of the engineering and design
contractor(s), EPC contractor(s), equipment supplier(s), and construction schedules for the
Project.
a) For each engineering and design contractor, EPC contractor and equipment supplier to be
involved in the Project, describe their major activities as linked to specified cost milestones
and performance guarantees, as well as performance guarantees, performance bonds,
liquidated damages provisions, and equipment warranties to be provided.
b) Describe the following:
(i) The extent to which all required contractors are engaged; and
(ii) The extent to which pre-construction design has been completed.
c) Describe each contractor or supplier’s experience and qualifications as related to the Project.
Attachment A – Part II Submission
32
3.
Key Site Components: Describe the key site components of the Project and risks associated
with their availability (e.g., water, electricity, gas, or other utilities). Describe site access (roads,
highway, and rail) including rights-of-way, easements, and logistical considerations.
4.
Operation Costs: Provide an estimate of operation costs on an annual basis.
5.
Project Plan: Provide a comprehensive Project plan that will guide design, engineering, and
construction of the Project, including a description of:
a) Prior successful implementation of similar project plans for projects of this scale by the
Applicant or any Project Sponsor (Applicants that are not able to include examples of
successful implementation of similar project plans for projects of this scale should provide a
detailed description of the facts that they believe are sufficient to demonstrate to DOE that
they have the expertise that would be evidenced in examples of successful implementation of
similar project plans for projects of this scale. DOE will determine, in its sole and final
judgment, whether the experience described shows sufficient expertise);
b) Each step of the proposed process;
c) Fully sourced or cited material and energy balance, including system simulation for
processes, using industry standard software;
d) The process for selecting an EPC firm, if applicable, or the internal resources used to serve
this function;
e) Equipment requirements;
f) Rights or licenses to use processes proposed;
g) An integrated schedule or Project work plan that encompasses time periods for design,
procurement (including long-lead procurements), construction (including mobilization,
testing and start-up), and commissioning. The Project shall identify any Project dependencies
such as the timing of land-use agreements, environmental permits, or licenses, or physical
improvements such as utility tie-ins.
h) Minimum design specifications in which process flow diagrams are coupled to preliminary
cost estimates.
i)
Project management tools, including Gantt charts, resource-based scheduling or other
methods to assess and track progress;
j)
Staffing plans, including identification of costs and resources to design, engineer, construct,
and operate the Project;
k) Project risks and mitigation strategies, including risk related to scale-up, construction,
performance, etc. and the potential Project impact and mitigation of such risks; and
l)
Contingency plans to address cost overruns and schedule slippage.
Attachment A – Part II Submission
33
6.
Operating and Maintenance Plans: Provide the following:
a) The plant operating plan, proposed providers, expected staffing requirements, anticipated
parts inventory, major maintenance schedules, estimated annual downtime and any
performance guarantees and related liquidated damages provisions;
b) A description of the plans for commissioning and initial operations, taking into account the
construction schedule, the establishment of material supply chains, the hiring, and training of
management and operating personnel, logistics, potential bottlenecks, and delays, financing
for contingencies and working capital;
c) A description of any plans for expanding capacity over initial operations and the Applicant or
the Project Sponsor’s experience with comparable ramp-ups; and
d) A description of the operations and maintenance plans for the Project, including acquisition
of critical spares, inventory sources, operations and maintenance procedures, and associated
risks.
7.
Engineer’s Report: Provide an independent engineer’s report that includes a review, evaluation,
analysis, and recommendations in the following areas:
a) base technology,
b) Project feasibility;
c) engineering and design approach;
d) integrated Project schedule, including the schedule for completion;
e) cost estimates and technical input to the financial model;
f) contractual requirements and arrangements;
g) proposed supply chain;
h) Project risks, including mitigation activities and milestones;
i)
direct labor requirements during construction and operation;
j)
siting and permitting;
k) testing and commissioning;
l)
operation and maintenance; and
m) decommissioning plan and costs.
8.
Decommissioning Plan: Provide a detailed description of the Project decommissioning,
deconstruction, and disposal plans (including any hazardous waste disposal plans), including
anticipated costs and arrangements that have been made to ensure that funding will be available
as necessary.
Attachment A – Part II Submission
34
F. Legal and Regulatory Information
1.
Legal Opinions/Material Reports: Provide a copy of all applicable legal opinions, and other
material reports, analyses and reviews concerning the Project.
2.
Permits and Approvals: Provide a complete list of federal, state, and local permits, licenses,
and approvals required to site, construct, implement, and operate the Project, including
environmental authorizations or reviews necessary to commence construction. For permits and
approvals already received, provide the filing and approval dates and parties involved. For all
remaining required permits and approvals, provide documentation validating the filing date and
the expected date(s) for obtaining them and describe all additional actions required to obtain such
permits and approvals. Explain whether governmental entities (other than DOE) are required to
approve the activities of the Applicant contemplated by this Solicitation or described in the
Application.
3.
Background and Legal Structure:
a) Describe the organizational history, ownership chain, and legal structure (e.g., corporation,
partnership, or LLC) of the Applicant and each Project Sponsor.
b) Include copies of the statutory authorities under which the Applicant and each Project
Sponsor were created and copies of the good standing certificates for each such entity.
c) Provide a current organizational chart showing the Applicant’s relationship to each Project
Sponsor, the venture and to any subsidiaries or affiliates. Advise if there are any proposed
changes to the current organizational structure of the Applicant.
d) Describe whether the Project will be owned by a subsidiary of the Applicant or directly by
the Applicant.
4.
Legal Authority: Describe the legal authority of the Applicant to carry out the Project activities.
Provide supporting documentation.
5.
Litigation and/or Conflicts: Disclose any current, threatened (in writing), or pending litigation
involving the Applicant, a Principal, or, to the Applicant’s knowledge, any other relevant party,
related to permitting, public involvement, environmental issues, construction defects, fraud,
securities fraud, conflict of interest, failure to perform under a local, state or federal contract, or
other charges which may reflect on the Applicant’s, Principal’s, or any Project Sponsor’s
reputation, financial position or ability to complete the Project.
6.
Potential Environmental Impacts: Submit a report containing the status of all state and local
environmental reviews and an analysis of the potential environmental impacts and risks of the
Project in sufficient detail to enable DOE to assess the significance of the environmental impacts
and risks and to determine the level of environmental review that will be required. See
Attachment B for guidance regarding required environmental information for the NEPA review
process.
G. Business Plan
Provide a business plan that demonstrates the Applicant’s expertise, financial strength, and management
capability to undertake and operate the Project as proposed.
1.
Output: Provide a detailed description of the Project’s output.
Attachment A – Part II Submission
35
2.
Applicant’s Capability: Describe in detail the capabilities and experience of the Applicant and
each Project Sponsor, Principal, contractor, and every other counterparty that the Applicant
believes will enable the Project to be successful.
3.
Market Analysis:
a) Include an analysis of the current and projected market for the Project’s output. Discuss the
prevailing economic and demographic trends in the target market, both on a macroeconomic
basis and for the Project’s output. Identify the market’s dependency on tax benefits or other
government policy. Provide a justification for revenue projections (price and volume) and
costs. Describe the Project’s projected customer base and suppliers.
b) Describe the Applicant’s current and potential competitors for the Project’s output.
c) Provide a detailed description of any competitive advantages.
4.
Operating and Market-Related Risks and Mitigation Strategies: Provide a detailed analysis
of the operating and market-related risks associated with the Project (e.g., market factors, price
volatility, etc.) and mitigation strategies to be employed (e.g., sales contracts and reserves).
5.
Management Plan:
a) Provide a staffing chart indicating the individuals (including position and qualifications)
proposed to operate the Project. Provide a description of the management plan of operations
to be employed in carrying out the Project, and information concerning the management
experience of each officer or key person associated with the Project; and
b) Describe the role of management in the operation of the Applicant’s other businesses, if any.
6.
Supply and Sales Arrangements:
a) Provide a detailed analysis of the market for the Project’s feedstock and output;
b) Provide a detailed description of the Project’s plans for ensuring an adequate supply of
materials, equipment, and components as needed for successful operation. Provide drafts or
executed copies of all material supply contracts for the Project;
c) Provide the Project’s forecast for sales capacity and feedstock (availability and costs);
d) Provide drafts or executed copies of all feedstock agreements and sales contracts or other
revenue-generating agreements that will provide revenue for the Project. Provide an analysis
of the creditworthiness of counterparties who are party to such agreements; and
e) Provide copies and detailed summaries of all other material sales and revenue contracts.
7.
Insurance Coverage: Provide a detailed description of the proposed insurance coverage for the
Project, together with a report from an insurance consultant that addresses the appropriateness
and adequacy of such coverage.
8.
Growth Plan: Describe any proposals for expanding the business enterprise beyond the Project.
9.
Jobs Created/Retained: Provide a brief description of the number and types of jobs expected to
be created or retained in the United States if the Project were to proceed as proposed in the
Attachment A – Part II Submission
36
Application. The types of jobs may be expressed using job titles, broad labor categories, or the
Applicant’s existing practice for describing jobs provided that the descriptions so provided are
commercially identifiable. The number of jobs shall be expressed as full-time equivalent,
calculated cumulatively as all hours worked divided by the total number of hours in a full-time
schedule, as defined by the Applicant. Applicants should include in their narrative the
information used to calculate the full-time equivalent figure.
H. Financial Plan
1.
Financial Statements: Provide unaudited financial statements for the Applicant for the past two
years (or since inception of the Applicant has not been in existence for at least two years),
prepared in accordance with generally accepted accounting principles in the United States (“U.S.
GAAP”). Include all associated notes and describe business and financial interests of controlling
or commonly controlled organization or persons, including parent companies, subsidiaries, and
other affiliated entities or partners of the Applicant or Project Sponsors.
2.
Project Financial Model and Analysis:
a) Include a working financial model (with formulas) with pro-forma financial statements for
the Project. List the major assumptions in a separate worksheet within the model.
(i) Include assumptions and calculations for the proposed tenor of the Guaranteed
Obligation, plus two (2) years.
(ii) Include detailed income statements, balance sheets, cash flow statements, and waterfall
statements.
(iii) Include financial ratios (e.g., interest coverage ratios, fixed charge coverage ratios, debtto-capital ratios, asset coverage ratios, and working capital ratios (including high and low
points)) and other relevant terms in the proposed term sheet. Highlight those periods
during construction and operation in which non-compliance with the proposed financial
ratios is most likely.
(iv) Include sensitivity analyses that demonstrate the Project’s performance under appropriate
stress scenarios, including low sales prices, reduced Project performance, loss of major
customers, high input material prices, and the impact of future competing technologies.
(v) Include cost assumptions based on compliance with the Davis-Bacon Act.
(vi) Include a complete description of the operational and financial assumptions and
methodologies incorporated in the financial model.
b) The financial analysis should demonstrate that there is reasonable prospect that the Applicant
will be able to repay the principal and interest on the Guaranteed Obligation and any other
Project debt incurred. Discuss the principal factors that could impair the Applicant’s ability
to meet its debt service obligations, including the Guaranteed Obligation.
3.
Detailed Financial Plan: Provide a detailed financial plan for the Project, prepared in
accordance with U.S. GAAP.
a) List all proposed sources of expected equity and debt funding by provider, type, and
aggregate amount, and provide a copy of the financial closing checklists for each financing, if
available.
Attachment A – Part II Submission
37
b) Describe uses, timing, and amount of expected equity and debt funding.
c) For each party associated with the Project, provide a detailed description of their projected
liabilities over the term of the Loan Guarantee Agreement.
d) Include a summary of any funding intended to be procured through the use of special purpose
entities. Summarize each tranche of funding (e.g., amount, maturity, amortization schedule,
the proposed loan guarantee percentage, and whether it is a fixed- or floating-rate tranche).
e) Include a summary of any funding that will be tax-advantaged debt to which Section 149(b)
of the Internal Revenue Code may be applicable. Summarize measures that will be taken to
avoid (i) effective subordination of federally guaranteed debt to tax-advantaged debt, (ii) the
use of any federal guarantee as collateral to secure tax-advantaged debt, and (iii) any linkage
of federally guaranteed debt with tax-advantaged debt.
f) Include a schedule indicating all anticipated short term financing or credit facilities required
for on-going operations of the Project, including all working capital facilities, performance
bonds and similar forms of financing available to or anticipated to be available to the Project.
Describe the nature of the security or collateral that is intended to be made available to secure
these working capital and other short term facilities.
4.
Proposed Term Sheet:
Obligation.
Include a very detailed proposed term sheet for the Guaranteed
5.
Credit History: Provide the credit history of the Applicant and any business entity owning or
controlling a five percent (5%) or greater interest in the Project or the Applicant, the offtaker(s),
the feedstock supplier, if applicable, and the EPC contractor. Provide the full name of the entity,
address, and date of organization.
6.
Collateral: Provide a listing, describe, and value all assets associated, or to be associated, with
the Project and any other assets that will serve as collateral for the Guaranteed Obligations,
including any intellectual property necessary for the operation of the Project. Valuations must be
supported by independent, third-party appraisals for existing assets and commercial cost
substantiation for assets to be constructed for the purpose of the Project, and in all cases
acceptable to DOE. An appraisal of real property must be performed by a licensed or certified
appraiser consistent with the Uniform Standards of Professional Appraisal Practice promulgated
by the Appraisal Standards Board of the Appraisal Foundation. The appraisal should include
information on the useful life of all physical assets expected to serve as collateral, including a
depreciation schedule (prepared in accordance with U.S. GAAP).
7.
Consideration of Pari-Passu Status: Provide information and financing documents regarding
any existing senior secured debt of any party providing a guarantee or other credit support.
8.
Preliminary Credit Assessment: Provide a preliminary credit assessment for the Project from a
nationally recognized rating agency.
a) If the Project will be financed using a corporate financing structure or will benefit from any
third-party guarantees, provide a detailed public or private credit assessment of the Borrower
and Project Sponsor or such third-party guarantor. Such assessment should take into account
the impact of the proposed transaction on the Borrower and Project Sponsor or such thirdparty guarantor’s credit rating and evaluate the Project Sponsor or third-party guarantor’s
financial viability in the absence of a DOE loan guarantee or any other credit support.
Attachment A – Part II Submission
38
b) If the Project will be financed using a project financing structure, provide a detailed public or
private credit assessment of the Project. Such assessment should evaluate the Project in the
absence of a DOE loan guarantee or any other credit support.
9.
I.
Other Financial Information: Include any other information about the Applicant and any
Project Sponsor that provides a comprehensive summary of the Applicant or Project Sponsor’s
business and financial situation, including specific information relevant to analyzing historical
cash flow on a secular, normalized basis.
Certifications
1.
Lobbying, Debarment, and Related Certifications and Assurances: In submitting an
Application for a loan guarantee under Title XVII, Applicants must provide certain certifications
and assurances contained in the form entitled “Certifications for Use with Applications for
Department of Energy Loan Guarantees under title XVII of the Energy Policy Act of 2005”
which form may be downloaded from the Program Website:
http://energy.gov/sites/prod/files/Certifications%20for%20Use%20with%20Doe%20Loan%20Gu
arantees.pdf
2.
Applicant Validation Statement: Provide a written statement and supporting analysis attesting
that, based on the information provided to DOE, there is a reasonable prospect that all debt of the
Project (including the Guaranteed Obligation) will be repaid on time and in full (including
interest) from cash flow generated by the Project and in accordance with the terms proposed in
the Application.
As part of the Project evaluation process, DOE may require that Applicants provide additional
certifications or supporting documentation. DOE is not authorized to issue a loan guarantee to
any party that is delinquent on federal debt, including federal tax debt.
3.
Penalty of Perjury Statement: The following certification must be included with each
Application:
“The undersigned certifies that the data and information submitted and the representations made
in this Application and any attachments to this Application are true and correct, to the best of the
Applicant’s knowledge and belief after due diligence, and the Applicant has not omitted any
material facts. The undersigned further certifies to having full authority to bind the Applicant.
_________________________________
Applicant (Organization Name)
_________________________________
Name of Applicant’s Authorized Officer
(will fulfill on-line certification)
_________________________________
Signature of Authorized Officer
(for paper copy only)
_________________________________
Title of Authorized Officer
_________________________________
Date”
Attachment A – Part II Submission
39
ATTACHMENT B - NATIONAL ENVIRONMENTAL POLICY ACT COMPLIANCE
I.
Information to be Submitted to DOE in an Application
Under Section III.B of this Solicitation, an Application must include a report containing an analysis of the
potential environmental impacts of the Project that will assist DOE in assessing whether the Project will
comply with all applicable environmental requirements and will enable DOE to complete any necessary
reviews under NEPA. Accordingly, each Applicant should submit the following information to assist
DOE in determining the appropriate level of NEPA review, and in preparing an EA or EIS if necessary:
A. Description of Project Facilities, Site, and Surrounding Location: Describe and, as appropriate,
identify and quantify:
1.
Purpose of the Project facility and materials produced, including how they would be
transported;
2.
Present an overall schematic process diagram that identifies all inputs and outputs;
3.
New facilities to be constructed, existing facilities to be modified, and materials and equipment
to be used in construction;
4.
Size of the new and modified facilities and of the total Project site (including support facilities
needed, such as parking lots and treatment facilities, and associated land uses, such as
agricultural production areas);
5.
Extent of necessary site clearing and excavation;
6.
Associated construction of transport infrastructure (e.g., access roads, railroad links, docks,
pipelines, and electrical transmission facilities) or waste treatment facilities;
7.
Construction milestones;
8.
Expected operating cycle and any aspects of the Project that could result in impacts that vary
over time (e.g., with time of day or season of the year);
9.
Expected Project lifetime, including expansion of initial Project at the proposed site and to other
sites;
10.
Project site and location, including a map;
11.
Whether a Phase 1 Environmental Site Assessment has been completed, if so, summarize
results;
12.
Ownership of or jurisdiction over the land by federal, state, regional, or local agency;
13.
Existing transportation corridors and infrastructure (e.g., electricity, natural gas, water, and
wastewater);
14.
Nearby land use and features (e.g., residences, industrial facilities, and recreational areas);
Attachment B - NEPA Guidance
40
15.
Areas with special designation both on the Project location and nearby, including national
forests, historic or culturally significant sites, wetlands, floodplains, critical habitat for
designated threatened or endangered species or the presence of those species, prime and unique
farmland;
16.
Ambient air quality; and
17.
Near-by human populations (including minority and low-income).
B. Resource Consumption Rates and Effluent Emissions Streams and Impacts:
1.
For both construction and operation, describe and, as appropriate, identify and quantify:
a) Material resources to be used, including how they would be transported;
b) Source(s) and rates of water consumption and adequacy of water supply sources;
c) Onsite and offsite releases (air emissions, including carbon dioxide, odors; water effluents
and other liquid waste streams; solid and hazardous waste), including rate and duration of
such substances as criteria pollutants, wastewater, and hazardous substances;
d) Onsite and offsite waste treatment and disposal; and
e) Number of on-site workers.
2.
Identify a spectrum of scenarios that could result from process upsets, accidents, human error,
and intentional destructive acts.
3.
Analysis of potential impacts to physical, biological, cultural, and socioeconomic resources
from facility construction and operation, including any mitigating measure(s) to be used or
considered to be used to reduce environmental impacts, or any adverse effects that cannot be
avoided.
C. Status of other environmental and regulatory reviews: Such status reports should include, but not
be limited to:
1.
If the Project would require review or permitting by another federal agency or by a state,
regional, or local agency, identify the required reviews and permits and tell the status of each;
and
2.
If an environmental impact review (e.g., NEPA documentation or agency consultations) has
been prepared (or is in the process of being prepared or is anticipated) for the Project (by
another federal agency or a state agency), provide a summary or copy of the review.
D. Alternative sites or operating parameters: Please identify:
1.
Any other sites considered for the Project, and state whether they remain options or give the
reasons for not proposing them; and
2.
Any alternative operating parameters for the Project (e.g. materials or processes to be used) and
state whether they remain options or give the reasons why options are not available.
Attachment B - NEPA Guidance
41
E. Post-operational requirements: To the extent possible, please describe:
1.
Any reasonably foreseeable future requirements, including site close-out and site restoration;
and
2.
Any related decontamination and decommissioning activities, including associated waste
streams.
F. Other actions in the Project area: Describe existing or possible future facilities and activities that
may impact the same resources as the Project in the same geographic area(s) during the same
operational time frame, including those by other agencies, companies, or individuals.
Attachment B - NEPA Guidance
42
ATTACHMENT C - SUMMARY LIFECYCLE GHG EMISSION DATA WORKSHEET
The OMB Control Number for this collection of information is 1910-5134. The OMB expiration date for
this collection of information is 11/30/2016.
Burden Disclosure Statement
This data is being collected to support Applications for loan guarantees from the Department of Energy under
Title XVII of the Energy Policy Act of 2005, as amended (42 U.S.C. §16511, et seq.). The data you supply will
be used for the review of Applications for loan guarantees under Title XVII.
Public reporting burden for this collection of information is estimated to average 130 hours per response,
including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data
needed, and completing and reviewing the collection of information. Send comments regarding this burden
estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to
the Office of the Chief Information Officer, Records Management Division, IM-23, U.S. Department of Energy,
1000 Independence Ave SW, Washington, DC, 20585-1290; and to the Office of Management and Budget,
OIRA, Washington, DC 20503.
Notwithstanding any other provision of the law, no person is required to respond to, nor shall any person be
subject to a penalty for failure to comply with, a collection of information subject to the requirements of the
Paperwork Reduction Act unless that collection of information displays a currently valid OMB control number.
The OMB Control Number for this collection of information is 1910-5134. The OMB expiration date for this
collection of information is 11/30/2016.
Submission of this data is required to obtain a guarantee of the repayment of principal and interest on loans
relating to Projects that qualify for such guarantees under Title XVII of the Energy Policy Act of 2005 (42 U.S.C.
§16511, et seq.).
Attachment C – Summary Lifecycle GHG Emissions Data Worksheet
43
SUPPLEMENT
TO
LOAN
GUARANTEE
SOLICITATION
ANNOUNCEMENT
FEDERAL
LOAN
GUARANTEES
FOR
ADVANCED
FOSSIL
ENERGY
PROJECTS
Solicitation
Number:
DE-‐SOL-‐0006303
OMB
Control
Number:
1910-‐5134;
OMB
Expiration
Date
11/30/2016
Announcement
Type:
Supplemental
Supplement
Date:
July
8,
2014
The
above-‐reference
Loan
Guarantee
Solicitation
Announcement
(the
“Solicitation”)
is
supplemented
as
set
forth
below
(capitalized
terms
used
herein
and
not
otherwise
defined
have
the
meanings
ascribed
thereto
in
the
Solicitation).
Section
VIA1
“Application
Fee”
and
section
VIA2
“Facility
Fee”
are
deleted
and
the
following
is
inserted
in
their
places:
1.
Application
Fee:
Applicants
must
pay
a
non-‐refundable
Application
fee
(the
“Application
Fee”).
The
Application
Fee
will
be
payable
as
follows:
a) Fifty
Thousand
Dollars
($50,000)
must
be
paid
on
or
prior
to
the
date
on
which
an
Applicant
submits
Part
I
of
its
Application.
This
first
payment
must
be
wired
to
Treasury
no
later
than
11:59
pm
Eastern
Time
on
the
due
date
for
the
Applicant’s
desired
round
of
Part
I
submissions.
b) The
remainder
of
the
Application
Fee
must
be
paid
on
or
prior
to
the
date
on
which
an
Applicant
submits
Part
II
of
its
Application.
This
second
payment
must
be
wired
to
Treasury
no
later
than
11:59
pm
Eastern
Time
on
the
due
date
for
the
Applicant’s
desired
round
of
Part
II
submissions.
The
remainder
of
the
Application
Fee
is
$350,000,
except
as
described
below.
Applicants
requesting
an
amount
that
does
not
exceed
$150,000,000
as
the
principal
amount
of
the
Guaranteed
Obligation
pay
$100,000
on
or
prior
to
the
date
on
which
an
Applicant
submits
Part
II
of
its
Application.
Applicants
requesting
an
amount
that
exceeds
$150,000,000
as
the
principal
amount
of
the
Guaranteed
Obligation
pay
$350,000
on
or
prior
to
the
date
on
which
an
Applicant
submits
Part
II
of
its
Application.
2.
Facility
Fee:
All
Applicants
must
pay
a
non-‐refundable
facility
fee
(the
“Facility
Fee”)
in
an
amount
equal
to
1.0%
for
the
portion
of
the
principal
amount
of
the
Guaranteed
Obligation
that
does
not
exceed
$150,000,000.
For
applications
as
to
which
the
principal
amount
of
the
Guaranteed
Obligation
exceeds
$150,000,000,
Applicants
pay
an
amount
equal
to
1%
for
the
portion
of
the
principal
amount
of
the
Guaranteed
Obligation
that
does
not
exceed
$150,000,000
plus,
for
the
portion
of
the
Guaranteed
Obligation
that
exceeds
$150,000,000,
an
additional
.60%.
For
example,
an
Applicant
for
a
Guaranteed
Loan
in
the
principal
amount
of
$250,000,000
would
pay
$1,500,000
(1.0%
of
the
first
$150,000,000)
plus
$600,000
(.60%
of
the
amount
over
$150,000,000)
for
a
total
Facility
Fee
of
$2,100,000.
The
Facility
Fee
will
be
payable
as
follows:
a) Twenty-‐five
percent
(25.0%)
of
the
Facility
Fee
must
be
paid
on
or
prior
to
the
date
on
which
the
Applicant
executes
a
DOE-‐approved
Term
Sheet.
b) Seventy-‐five
percent
(75.0%)
of
the
Facility
Fee
must
be
paid
prior
to
the
financial
closing
date
for
a
Loan
Guarantee
Agreement.
*
*
*
*
*
*
*
*
*
*
SECOND
SUPPLEMENT
TO
LOAN
GUARANTEE
SOLICITATION
ANNOUNCEMENT
FEDERAL
LOAN
GUARANTEES
FOR
ADVANCED
FOSSIL
ENERGY
PROJECTS
Solicitation
Number:
DE-‐SOL-‐0006303
OMB
Control
Number:
1910-‐5134;
OMB
Expiration
Date
11/30/2016
Announcement
Type:
Supplemental
Supplement
Date:
November
12,
2014
The
above-‐reference
Loan
Guarantee
Solicitation
Announcement
(the
“Solicitation”)
is
supplemented
as
set
forth
below
(capitalized
terms
used
herein
and
not
otherwise
defined
have
the
meanings
ascribed
thereto
in
the
Solicitation).
Section
VA
“Application
Submission
Schedule”
and
section
VIA4
“Wiring
Instructions”
are
deleted
and
the
following
is
inserted
in
their
places:
Application
Submission
Schedule
The
following
are
the
Part
I
and
Part
II
Application
due
dates:
Part
I
Due
Dates
February
28,
2014
April
30,
2014
July
31,
2014
November
19,
2014
January
14,
2015
March
18,
2015
May
13,
2015
July
15,
2015
September
16,
2015
November
18,
2015
December
30,
2015
Part
II
Due
Dates
May
30,
2014
August
29,
2014
October
31,
2014
December
17,
2014
February
18,
2015
April
15,
2015
June
17,
2015
August
19,
2015
October
14,
2015
December
16,
2015
February
17,
2016
Additional
rounds
may
be
announced
in
a
supplement
to
this
Solicitation.
Treasury
Wiring
Instructions:
Application
Fees,
Facility
Fees,
Maintenance
Fees,
and
Extraordinary
Expense
Fees
will
only
be
credited
by
wire
transfers
to
the
following
address:
Receiving
Financial
Institution
U.S.
Department
of
Treasury
Federal
Reserve
Bank
of
New
York
Address
33
Liberty
Street
New
York,
NY
10045
Receiver
ABA
Number
021030004
Receiver
ABA
short
name
TREAS
NYC
Business
Function
Code
CTR
(or
CTP)
Account
(BNF/AC)
89000001
Beneficiary
Name
DEPARTMENT
OF
ENERGY
Originator
to
Beneficiary
Information
Insert
Solicitation
name,
type
of
fee
and
applicant
name
No
funds
for
the
payment
of
these
fees
may
be
obtained
from
the
federal
government
or
from
a
loan
or
other
debt
obligation
guaranteed
by
the
federal
government.
*
*
*
*
*
*
*
*
*
*
THIRD SUPPLEMENT TO LOAN GUARANTEE SOLICITATION ANNOUNCEMENT
FEDERAL LOAN GUARANTEES FOR ADVANCED FOSSIL ENERGY PROJECTS
Solicitation Number: DE-SOL-0006303
OMB Control Number: 1910-5134; OMB Expiration Date 11/30/2016
Announcement Type: Supplemental
Supplement Date: June 23, 2015
The above-referenced Loan Guarantee Solicitation Announcement (the “Solicitation”) is
supplemented as set forth below (capitalized terms used herein and not otherwise defined have the
meanings ascribed thereto in the Solicitation).
The following is inserted as the first illustrative example in the final paragraph of Section IIB:
sensors and controls to improve operations efficiency,
The following is inserted at the end of Section IIC “Scope of Solicitation”:
A project that uses advanced fossil energy technology is a project: (a) that uses fossil energy to produce
electricity, fuels or chemicals, or any combination thereof; (b) whereby the fossil energy inputs are
either (i) a majority of total energy feedstocks1 or (ii) technologically necessary to the operation of the
innovative technology in more than de minimus amount. For projects that capture and store carbon
produced by existing or proposed facilities, LPO would look to the fossil energy inputs into such existing
or proposed facilities to apply this test.
A project’s efficiency is determined as follows:
For power generation projects, generally, to be considered efficient, the project must generate more
power from the same amount of energy (including feedstock and process energy), as compared to
current commercial processes in the U.S. For certain kinds of projects, such as waste-to-energy projects
and cogeneration projects, the LPO may compare the efficiency of the proposed technology more
specifically than by reference to U.S. generation technologies more generally.2
For transmission or distribution projects, to be considered efficient, the project must have lower
electricity losses over an equivalent distance, as compared to current commercial processes in the U.S.
1
Note that this excludes process energy for the feedstock test. Thus fossil-dependent upfront and other processes
will not exclude a project from eligibility as a Renewable Energy Project (and vice versa) assuming they do not
cause ineligibility through GHG lifecycle analysis.
2
Note: This statement provides LPO the flexibility where LPO deems it appropriate to consider other baselines for
the assessment of the energy efficiency of a project. An example is a hypothetical project that employs an
innovative technology to generate electricity from waste instead of just incinerating it for disposal. Even if that
project reduces greenhouse gases versus conventional incineration, it might produce electricity less efficiently than
the grid. This statement makes clear that LPO could (but is not required to) consider efficiency versus conventional
incineration instead of conventional generation, or some other baseline, to evaluate the improved efficiency of the
project.
Efficient electrical generation, transmission, or distribution projects are not required to use any
particular feedstock or feedstock mix.
For projects that use end-use technologies, to be considered efficient, the project must consume less
total energy in its energy conversion process for services or the production of fuels, chemicals or other
end-products, as compared to current commercial processes in the U.S.
Energy efficiency projects include infrastructure projects that enable efficiency (e.g. Sensors, controls,
etc.) related to such projects.
**********
FOURTH SUPPLEMENT TO LOAN GUARANTEE SOLICITATION ANNOUNCEMENT
FEDERAL LOAN GUARANTEES FOR ADVANCED FOSSIL ENERGY PROJECTS
Solicitation Number: DE-SOL-0006303
OMB Control Number: 1910-5134; OMB Expiration Date 11/30/2016
Announcement Type: Supplemental
Supplement Date: August 24, 2015
Background
As used in this supplement the term “Distributed Energy Projects” means projects that are
comprised of installations of facilities utilizing a single technology, or a defined suite of
technologies (either is referred to herein as “Distributed Technology”), at multiple sites, deployed
pursuant to a master business plan.
Distributed Energy Projects are currently driving innovation and transforming U.S. energy markets.
Technologies such as rooftop solar, energy storage, smart grid technology, and methane capture
for oil and gas wells, solve key energy challenges. Catalyzing these technologies and
demonstrating the viability of these markets would create economic opportunity, strengthen
energy security, transform certain energy markets, and reduce greenhouse gas emissions.
However, Distributed Energy Projects utilizing innovative technology are not being deployed at
scale due in part to capital constraints associated with the structuring of Distributed Energy
Projects and the innovative technologies that such projects use.
The Department of Energy’s (“DOE”) Loan Programs Office (“LPO”) administers the loan guarantee
program authorized by Title XVII of the Energy Policy Act of 2005, as amended, 42 U.S.C. §§1651116516 (“Title XVII”). Title XVII addresses the capital constraints associated with innovative
technologies in order to accelerate the domestic deployment of such innovative energy
technology.
LPO believes that many potential Distributed Energy Project applicants may be reluctant to submit
applications under the above-identified solicitation due to uncertainty as to LPO’s determination
of the eligibility of such projects or the acceptability of a Distributed Energy Project structure.
LPO believes that Distributed Energy Projects can be eligible projects under its currently
outstanding Loan Guarantee Solicitation Announcement relating to Federal Loan Guarantees for
Advanced Fossil Energy Projects, Solicitation Number: DE-SOL-0006303 (the “Solicitation”).
However, Distributed Energy Projects require different financial structures compared to the
majority of LPO’s current portfolio of large, centralized projects.
Consequently, LPO is supplementing the Solicitation to make clear that it will accept and consider
applications for Distributed Energy Projects and to illustrate how a Distributed Energy Project
transaction could be properly structured. LPO understands that other project structures may exist
or be developed, and is prepared to accept and consider applications for projects that utilize such
structures.
LPO has received inquiries from stakeholders as to whether state-affiliated financial entities,
including state green banks, may submit applications for Eligible Projects. The Supplement makes
clear that state and state-affiliated entities are invited to submit applications for Eligible Projects.
(None of Title XVII, the 1703 Regulations or the Solicitation prohibit state and state-affiliated
entities from becoming a Borrower, a lender or an equity participant in a Project solely as a result
of such entities being a state or a state-affiliated entity). Such state or state-affiliated entity
would be required to satisfy all other requirements for qualification as a Borrower, a lender or an
equity participant, as applicable. Accordingly, LPO is supplementing the Solicitation to make clear
that (1) state-affiliated financial entities, including state green banks, may submit applications for
Eligible Projects, including Distributed Energy Projects, and (2) state and state-affiliated entities
may participate in Distributed Energy Projects as lenders or co-lenders, equity providers, or offtakers. As with all Eligible Projects, the credit strength of the project will affect the credit subsidy
cost required to be paid at issuance of the loan guarantee, and with respect to state and stateaffiliated entities (as with all projects), state sponsorship, including state credit enhancements,
would be considered by LPO in evaluating the credit strength of the Project.
This supplement is issued under Title XVII and the implementing regulations set forth in Part 609
under Chapter II of Title 10 of the Code of Federal Regulations (the “1703 Regulations”), and is
subject to all of the terms and conditions thereof.
The Solicitation is supplemented as set forth below (capitalized terms used herein and not otherwise
defined in this supplement have the meanings ascribed thereto in the Solicitation).
The following is inserted as a new section, Section II.D, following Section II.C:
D. Distributed Energy Projects
A Distributed Energy Project, to be an Eligible Project under this Solicitation, must satisfy the
requirements under the definition of an Eligible Project under this Solicitation and (a) involve a
Distributed Technology, and (b) deploy installations of facilities at multiple sites utilizing that
technology pursuant to a master business plan.
1. Financing Structures
Typically, each installation or facility in a Distributed Energy Project would be too small, if
individually financed, to benefit from a DOE-guaranteed loan due to the transaction costs
associated with the financing and DOE’s participation. However, under certain circumstances,
DOE may issue loan guarantees to support the financing of an aggregation of such installations
and facilities, permitting the borrower to access financing under a single arrangement for the
multiple installations of the applicable facilities. A Distributed Energy Project using Distributed
Technology will constitute a single Project under Title XVII and the 1703 Regulations because the
aggregation of installations and facilities at multiple locations are integral components of a master
business plan, necessary to the viability of the Project. To establish that the Project will be located
in the United States at least one of the locations will be identified in the Application.
LPO believes that a Distributed Energy Project structured in a manner described in the three
examples shown in Diagrams A, B, and C below would be an acceptable project structure.
Example A
Diagram A – Key Features: Multiple Physical Sites with Single Site Owner, Utility-Scale Offtakers /PPA(s)
In the hypothetical example shown in Diagram A, the Project Developer/Sponsor (“Sponsor”), a
credit-worthy entity with experience developing projects employing similar technologies on a
distributed facility basis, forms the borrower/project company (“Borrower” and “Project
Company”) entity in partnership with other credit-worthy equity investors. Such
Borrower/Project Company receives equity contributions and/or guarantees from its Sponsor
resulting in not less than 20% of the total project costs being borne by the equity participants.
The Borrower/Project Company, which will develop, construct, operate and own, directly or
through one or more Project Company subsidiaries, revenue-generating assets consisting of
multiple installations of Distributed Technology at multiple sites, contracts with an experienced
master contractor, who may or may not be affiliated with the Sponsor, for fully-wrapped
engineering, procurement and construction services required for the installation of the eligible
technology.
Either the host sites are owned by a single, credit-worthy party, or the Borrower/Project Company
or its subsidiary, as applicable, will secure control of diversely owned sites in a manner that is 1)
highly standardized, and 2) structured to mitigate against the risk of unrated credit, as the case
may be, of the site owners. The universe of sites on which the installations would occur would be
identified in order to permit DOE to satisfy its obligations under the National Environmental Policy
Act (“NEPA”) and complete other necessary diligence. Alternatively, in some circumstances it may
be sufficient to identify the proposed sites categorically, with conforming site information to be
certified by the Borrower and verified and/or audited by LPO as the project proceeds after closing.
In either case, LPO would view favorably a structure whereby the Borrower/Project Company
leases the host sites from their respective owners on fixed terms not less than the loan term, and
Borrower/Project Company derives its revenue through a common offtake arrangement with a
creditworthy entity for at least the same term.
Example B
In the hypothetical example shown in Diagram B, the Borrower/Project Company derives its
revenues from standardized contracts, such as equipment leases or power purchase agreements
with multiple host site-owners, provided however that such host site-owners, individually and in
the aggregate, meet pre-defined credit criteria. In the latter case, LPO may look for greater equity
participation in the risk associated with the offtake arrangements. In such a project, LPO can
envision the Borrower/Project Company implementing its master business plan for installations of
Distributed Technology using two or more installers. In such a project, LPO would also anticipate
looking through a Distributed Energy Project’s lease, power purchase agreement or other revenue
contract structure to ensure that the Borrower/Project Company is not merely re-lending DOEguaranteed loan proceeds to project hosts for unreasonable profit.
Diagram B - Key Features: Multiple Physical Sites with Multiple Site Owners as
Offtakers/Customers, Multiple Installers
Example C
In the hypothetical example shown in Diagram C, the Borrower/Project Company operates a mobile
technology, deriving revenues from its temporary set up and operation of such technology at
multiple customer sites.
Diagram C - Key Features: Multiple Physical Sites/Customers, Using Mobile Technology
All Examples
In each of these example structures, LPO would expect successful Distributed Energy Projects to
develop highly standardized (or readily customizable) installation plans, in order to permit
replication and reduce construction risk. In instances where the equipment supply and the
construction process pose greater than normal risk, LPO would look more favorably on Distributed
Energy Projects structured in a manner to permit loan disbursements for project costs only after
the relevant installation and/or pool of installations is completed and tested in accordance with
the requirements of the Engineering, Construction, and Procurement Contract (“EPC”) and offtake
agreements.
To further mitigate risk and to facilitate LPO analysis at the credit decision and in connection with
each requested loan disbursement, and in order to permit the more rapid deployment of the
installations comprising a Distributed Energy Project, LPO would expect a successful Distributed
Energy Project to employ highly standardized contract forms for each of its site hosts, and would
look for common/master agreements for other project contracts and services including operation
and maintenance agreements, insurers, and credit agencies as applicable.
While the above structural examples describe only the basic parameters of project structures for
Distributed Energy Projects, LPO believes they are good baselines for the consideration of
prospective applicants for a Distributed Energy Project model. LPO will consider any of the above
financing models for the deployment of Distributed Energy Projects using qualifying technologies
as well as alternate financing models consistent with Title XVII and the 1703 Regulations.
2. Prohibited Borrower Activities
The Solicitation is not able to support borrowers in connection with any of the following activities:
Re-lending. The Solicitation does not involve a re-lending program. DOE will continue to be a
senior lender, control loan disbursements based on project milestones, and have full recourse to
adequate security.
Capitalization of State Green Banks. The Solicitation is not a vehicle to capitalize State green
banks. However, State green banks or other state entities are invited to submit an application for
a loan guarantee as an eligible borrower, sponsor, or co-lender under Title XVII and the 1703
Regulations. Moreover, any Distributed Energy Project involving a State green bank would need to
be fully defined, have a master business plan involving the deployment of Distributed Technology,
and satisfy all of the other criteria of Title XVII, the 1703 Regulations and this Solicitation.
Additionally, as with all project Sponsors, to the extent a State’s credit backs repayment of the
guaranteed loan, the State’s creditworthiness could affect the credit subsidy cost of the
transaction. Generally, a project backed by a State with strong credit would have a lower credit
subsidy cost than would a project that is not backed with a strong credit.
Low-cost financing. The Solicitation does not offer low-cost financing for proven commercial
technology. For example, standard energy efficiency technology is not eligible unless at least a
portion of the Project meets the Title XVII “innovation” requirements.
Multiple, unrelated technologies. Projects must deploy Distributed Technology and have a clear
master business plan. Loans would not support multiple, unrelated projects.
3. Illustrative Distributed Energy Project Technologies
The following sample list of potential types of eligible projects is provided for illustrative
purposes only. The sample list is not intended to be, and is not, exclusive or limiting. It is simply
intended to identify types of projects that could be eligible, subject to technical review.
Potential types of eligible projects may include but are not limited to:
Distributed Power Generation
Decentralized power or thermal energy generation projects that increase efficiency and minimize
losses associated with transmission and distribution by being located at the point of consumption.
• Distributed cogeneration and/or combined heat and power including steam turbines, natural
gas fuel cells, microturbines or reciprocating engines with the hot exhaust used for heating or
cooling. Distributed cogeneration projects can also include low carbon fuels coal bed methane,
syngas and associated petroleum gas.
• Distributed carbon capture and use.
• Distributed methane recovery and use such as small-scale liquefied natural gas or landfill gas
collection
**********
FIFTH SUPPLEMENT TO LOAN GUARANTEE SOLICITATION ANNOUNCEMENT
FEDERAL LOAN GUARANTEES FOR ADVANCED FOSSIL ENERGY PROJECTS
Solicitation Number: DE-SOL-0006303
OMB Control Number: 1910-5134; OMB Expiration Date 11/30/2016
Announcement Type: Supplemental
Supplement Date: October __, 2015
The above-referenced Loan Guarantee Solicitation Announcement, as previously supplemented (the
“Solicitation”) is supplemented as set forth below (capitalized terms used herein and not otherwise
defined have the meanings ascribed thereto in the Solicitation).
The second paragraph of Section I.B is deleted and the following is inserted in its place:
DOE will make up to Eight Billion Five Hundred Million dollars ($8,500,000,000) in loan guarantee
authority available under this Solicitation for Advanced Fossil Energy Projects. DOE’s authority to issue
this amount of loan guarantees was provided by the (a) Revised Continuing Appropriations Resolution,
2007, P.L. 110-5(the “2007 Appropriations Act”) and (b) Omnibus Appropriations Act, 2009, P.L. No. 1118, as amended by Section 408 of the Supplemental Appropriations Act, 2009, P.L. No. 111-32 (the “2009
Appropriations Act”) and remains available until committed. The loan shall be senior secured debt.
Section V.A “Application Submission Schedule” is deleted and the following is inserted in its place:
Application Submission Schedule
The following are the Part I and Part II Application due dates:
Part I Due Dates
October 1, 2014
November 19, 2014
January 14, 2015
March 18, 2015
May 13, 2015
July 15, 2015
September 16, 2015
November 18, 2015
December 30, 2015
January 13, 2016
March 16, 2016
May 18, 2016
July 13, 2016
Part II Due Dates
December 17, 2014
February 18, 2015
April 15, 2015
June 17, 2015
August 19, 2015
October 14, 2015
December 16, 2015
February 17, 2016
April 13, 2016
June 15, 2016
August 17, 2016
October 19, 2016
Additional rounds may be announced in a supplement to this Solicitation. The Application due dates set
forth in the Solicitation on the cover and in Section VA are no longer effective and should be ignored.
**********
SIXTH SUPPLEMENT TO LOAN GUARANTEE SOLICITATION ANNOUNCEMENT
FEDERAL LOAN GUARANTEES FOR ADVANCED FOSSIL ENERGY PROJECTS
Solicitation Number: DE-SOL-0006303
OMB Control Number: 1910-5134; OMB Expiration Date 11/30/2016
Announcement Type: Supplemental
Supplement Date: June 22, 2016
The above-referenced Loan Guarantee Solicitation Announcement (the “Solicitation”) is supplemented
as set forth below (capitalized terms used herein and not otherwise defined have the meanings ascribed
thereto in the Solicitation).
Section V.A “Application Submission Schedule” is deleted and the following is inserted in its place:
Application Submission Schedule
The following are the Part I and Part II Application due dates:
Part I Due Dates
October 1, 2014
November 19, 2014
January 14, 2015
March 18, 2015
May 13, 2015
July 15, 2015
September 16, 2015
November 18, 2015
December 30, 2015
January 13, 2016
March 16, 2016
May 18, 2016
July 13, 2016
September 14, 2016
November 30, 2016
Part II Due Dates
December 17, 2014
February 18, 2015
April 15, 2015
June 17, 2015
August 19, 2015
October 14, 2015
December 16, 2015
February 17, 2016
April 13, 2016
June 15, 2016
August 17, 2016
October 19, 2016
November 30, 2016
Additional rounds may be announced in a supplement to this Solicitation. The Application due dates set
forth in the Solicitation on the cover and in Section V.A are no longer effective and should be ignored.
| File Type | application/pdf |
| File Modified | 2016-07-26 |
| File Created | 2016-07-26 |