DOE finalizes $9.8B in financing for Rivian, Plug Power, Sunwealth, and Ioneer
Jeff St. John
5 min read
The Biden administration has been working down to the wire to finalize billions of dollars of federal backing for clean technology companies — and Rivian, Plug Power, and Sunwealth are among the latest companies to solidify deals before Donald Trump’s inauguration on Monday.
Late Thursday evening, the Department of Energy’s Loan Programs Office (LPO) announced the completion of its agreement to provide electric-vehicle manufacturer Rivian a loan guarantee of up to $6.57 billion.
That federal backing is aimed at enabling Rivian to secure lower-cost debt financing for a second EV factory in Georgia, a $5 billion project that was delayed in March in response to continual operating losses and softness in the EV market.
Also on Thursday, the LPO announced it closed a loan guarantee of up to $1.66 billion for Plug Power, a manufacturer of fuel cells and hydrogen electrolyzers. The guarantee is meant to help the company attract financing to build up to six facilities that will produce hydrogen with low or zero carbon emissions using its electrolyzers.
Plug Power, which has never turned a profit in its 20-year history, has seen losses mount and its share price fall as its core market of supplying fuel cells for forklifts has weakened and the broader clean hydrogen sector has struggled to get off the ground.
CEO Andy Marsh has said that the LPO loan guarantee is central to the company’s plan to expand from selling equipment to make and use hydrogen to actually producing hydrogen on its own. Plug Power’s foray into clean hydrogen production may be helped along by recently finalized tax-credit rules, although it’s unclear if the company’s sites will comply with the Biden administration’s strict rules for determining carbon-emissions impact.
Commercial solar firm Sunwealth also closed a $289.7 million loan guarantee on Thursday to help finance the buildout of commercial solar and storage systems that will form the basis of new virtual power plants in 27 states.
In another late-breaking announcement, LPO on Friday afternoon finalized a $996 million loan guarantee for Ioneer’s Rhyolite Ridge Lithium-Boron Project, a massive lithium and boron mining and processing facility in Nevada. That final commitment "upsized" the initial $700 million conditional commitment offered to Ioneer by DOE in early 2023.
The LPO has been supercharged by the Biden administration and the 2022 Inflation Reduction Act, which gave the office hundreds of billions of dollars in lending authority to act as a “bridge to bankability” for clean energy projects that may struggle to raise financing from private sources.
The past two months alone have seen the LPO issue tens of billions more in conditional commitments that have yet to be finalized. Those include a $15 billion loan for California utility Pacific Gas & Electric, $22.4 billion in loans for eight U.S. utilities across 12 states to bring down the cost of clean energy and infrastructure investments, $4.76 billion for a Midwestern transmission line project, and $1.7 billion for a compressed-air energy-storage project in California.
Biden’s DOE officials have stressed that the LPO’s finalized awards are legally binding contracts from the federal government, making them difficult to undo. Conditional commitments also represent contractual obligations from the DOE to allow the recipients to proceed to completion pending their ability to meet preset conditions, officials said. In a December statement to CNN, Biden’s LPO director, Jigar Shah, said it would be “irresponsible for any government to turn its back” on these commitments.
But Republicans in Congress have argued that the last-minute deals represent a conflict of interest between DOE officials and the companies they’re making deals with. Most recently, critics have cited a December report from the DOE Office of Inspector General recommending that the LPO halt loans until it can assure it is “complying with conflicts of interest regulations and enforcing conflict of interest contractual obligations."
Vivek Ramaswamy, the entrepreneur tapped by the Trump administration along with Elon Musk to co-lead a government budget-slashing effort, attacked the LPO after it issued its conditional commitment to Rivian in November.
“This smells more like a political shot across the bow at Elon Musk and Tesla,” Ramaswamy wrote in a post on X, the social-media platform owned by Musk.
LPO has been a money-maker for the federal government over its nearly two-decade history, collecting $5.4 billion in interest and $15 billion in principal payments as of September compared to its $1.03 billion in actual and estimated losses. A few LPO awardees have been high-profile flameouts, such as solar-module manufacturer Solyndra.
But others have been wildly successful, including Tesla, which was awarded a $465 million LPO loan in 2010 that helped the then-upstart EV manufacturer build its factory in Fremont, California. Tesla paid back that loan back in full in 2013, nine years ahead of schedule.
