The Inflation Reduction Act (H.R. 5376) introduced significant amendments to the existing loan program. It allocated around $11.7 billion to the Loan Programs Office (LPO) for new loans, boosting the loan authority in LPO’s current programs by approximately $100 billion. Additionally, it established a new program, the Energy Infrastructure Reinvestment (EIR) Program (section 1706), aimed at retrofitting, repowering, repurposing, or replacing non-operational energy infrastructure or enhancing the efficiency of operational infrastructure.
Title 17 Program
The Department of Energy’s (DOE) Loan Guarantee Program, created by Section 1703 of Title 17 of the Energy Policy Act (EPAct) of 2005, underwent reauthorization and modification under the American Recovery and Reinvestment Act (ARRA) of 2009, which added Section 1705 to EPAct. The 1705 Program concluded in September 2011, and no more Loan Guarantees are available under that provision. However, DOE retains the authority to issue Loan Guarantees under the original Section 1703 Program.
Section 1703 authorizes DOE to provide loan guarantees for high-technology risk projects that aim to mitigate air pollution or greenhouse gas emissions and incorporate new or significantly improved technologies compared to those commercially available in the U.S. at the time of the guarantee issuance. These loan guarantees are designed to promote the early commercial use of innovative energy technologies, excluding support for research and development projects.
The Inflation Reduction Act supplemented the Section 1703 program with an additional $40 billion in loan authority. It also allocated $3.6 billion in credit subsidy for these loans and earmarked a portion for administrative expenses, including monitoring and originating new loans. This extended loan authority covers all eligible Title 17 Innovative Clean Energy technology categories, encompassing fossil and nuclear energy. The appropriations under the Inflation Reduction Act also bolster activities authorized by the Bipartisan Infrastructure Law, supporting critical minerals processing, manufacturing, recycling, and State Energy Financing Institution-backed projects without the innovation requirement. More information on greenhouse gas reduction project eligibility without the innovation requirement can be found here if supported by a State Energy Financing Institution.
Energy Infrastructure Reinvestment (EIR) Program (Section 1706)
The Inflation Reduction Act inaugurated the Energy Infrastructure Reinvestment (EIR) Program under Title 17. This program focuses on projects that upgrade, repower, reconfigure, or replace defunct energy infrastructure or improve existing infrastructure to reduce or sequester air pollutants and greenhouse gases. The Act allocated $5 billion until September 30, 2026, for EIR, with a maximum loan cap of $250 billion.
Advanced Technology Vehicles Manufacturing Loan Program
The Advanced Technology Vehicles Manufacturing Loan Program (ATVM) originally had $15.1 billion in loan authority for producing eligible light-duty vehicles and components, as authorized by the Energy Independence and Security Act of 2007. So far, the program has loaned $8 billion, aiding the production of over 4 million advanced technology vehicles. The Inflation Reduction Act removed the $25 billion total loan cap, adding $3 billion available through September 30, 2028, for direct loan costs under ATVM. This funding is expected to provide an additional ~$40 billion in loan authority, bringing the total estimated available loan authority under ATVM to ~$55.1 billion.
Tribal Energy Projects
The Tribal Energy Loan Guarantee Program (TELGP) encourages tribal investment in energy-related projects by offering direct loans or partial loan guarantees to federally recognized tribes or Tribal Energy Development Organizations (TEDOs). The Inflation Reduction Act raised the total available loan amount under TELGP from $2 billion to $20 billion and provided $75 million through September 30, 2028, for TELGP execution under section 2602(c) of the Energy Policy Act of 1992.
