The Inflation Reduction Act (IRA) of 2022 represents the largest investment in climate and energy in American history. This legislation aims to address the climate crisis, promote environmental justice, strengthen domestic clean energy manufacturing, and work toward achieving the Biden-Harris Administration’s climate objectives, including a net-zero economy by 2050.

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The IRA allocates approximately $11.7 billion to the Loan Programs Office (LPO) to assist in issuing new loans, increasing the existing loan authority by about $100 billion. It establishes a new program, the Energy Infrastructure Reinvestment (EIR) Program, which is designed to support the repurposing of energy infrastructure that has ceased operations, as well as improving the efficiency of current infrastructure. This program is noted under section 1706 and has an appropriation of $5 billion, with a total cap on loans of up to $250 billion.

In the context of Title 17 Clean Energy Financing, the IRA provides an additional $40 billion in loan authority under section 1703 of the Energy Policy Act of 2005, available through September 30, 2026. It allocates $3.6 billion in credit subsidy to support these loans while also covering administrative expenses necessary for program implementation.

The EIR Program guarantees loans for projects that aim to repurpose, repower, or replace energy infrastructure. It targets efforts to reduce or sequester air pollutants and greenhouse gas emissions. The authority granted under Title 17 has been amended to clarify existing regulations and expand the scope of eligible projects to include retooling fossil energy facilities for clean energy production.

The Advanced Technology Vehicles Manufacturing (ATVM) Direct Loan Program sees the removal of a $25 billion cap on total loan amounts previously set by the Energy Independence and Security Act of 2007. This change allows the program to issue loans without limitation as long as appropriated credit subsidies are available. The IRA allocates $3 billion through September 30, 2028, which is expected to support an estimated $55.1 billion in loan authority under ATVM.

Additionally, the IRA raises the maximum amount of loans available under the Tribal Energy Finance Program from $2 billion to $20 billion and provides $75 million for its operation through September 30, 2028. This program facilitates energy development investments for federally recognized tribes by offering direct loans through the U.S. Treasury’s Federal Financing Bank.

The IRA also includes various tax incentives aimed at promoting the deployment of clean energy technologies and stimulating investment in domestic supply chains. The LPO intends to collaborate with other departments to identify opportunities for potential borrowers.

The LPO has witnessed considerable interest in loans, with 167 active applications totaling $143.9 billion in requested funds as of the end of August 2023. A historical overview indicates that prior investments have been pivotal for the commercial viability of renewable energy projects. LPO serves as a bridge for innovative energy technologies, providing access to necessary financing when private lenders may not be engaged.

The EIR Program is open for applications, and potential borrowers are encouraged to consult with LPO prior to submission. The IRA is expected to support loan authorities expanded by the Bipartisan Infrastructure Law, enhancing opportunities for eligible projects across various sectors.