Today’s WSJ takes a look at the shifting focus of the DOE’s loan-guarantee programs.
The DOE says it will start turning its attention away from wind and solar projects and toward even-less-developed technologies. Translation: Even greater risk for American taxpayers.
“We’re really focusing on transformative projects that can be grown to scale,” says Jonathan Silver, the head of the agency’s loan-program office….
A former venture capitalist, Mr. Silver calls the stage between development and commercial production for young clean-tech ventures a “valley of death” — a place where firms are ready to expand, but don’t have the commercial track record to impress private-sector lenders and investors.
Can’t “impress” private funders? No biggie. The Obama administration to the rescue! Using our money to help you try to achieve your dreams.
The Energy Department’s loan-guarantee program is open to clean-tech businesses of all sizes, which in the past have sought loans between $16 million and $1.3 billion. But Mr. Silver says the agency will be casting an even wider net for less-developed technologies in the new year.
Much like the U.S. Small Business Administration 7(a) loans, the Energy Department doesn’t disburse cash. Rather, it agrees to cover a venture’s debts with a commercial bank in the event of a default.
Greg Hayes says a loan guarantee would enable his firm, CleanWorld Partners LLC, to prove itself.
Founded last year, the company operates a prototype high-solid biomass processor on the University of California Davis campus that traps methane and other natural gasses. It has identified several revenue streams, but now requires as much as $3 million to ramp up.
Mr. Hayes says he’s approached several private lenders for the funding, but was denied.
“Right now we’re in that valley of death,” Mr. Hayes says. “But there are investors waving on the other side. We just have to get there.”
Have no fear, Mr. Hayes. That’s what we American taxpayers are here for.