Status and Outlook for the U.S. Department of Energy's Loan Programs Office

As President Donald Trump's administration embraces a whole-of-government strategy to scale back federal investments, many assume the U.S. Department of Energy's (DOE) Loan Programs Office (LPO) is once again at a crossroads. Yet, contrary to that perception, the administration appears positioned to leverage LPO as a strategic vehicle for catalyzing private sector investment in energy infrastructure – enhancing U.S. manufacturing competitiveness, strengthening supply chains and reinforcing the nation's energy dominance.

Though this position initially appears contrary to media reports and recent executive orders (EOs), in reality, the LPO fully aligns with the president's goals and objectives as an extremely cost-effective policy tool. Specifically, the program does not require a one-to-one cost expenditure, but instead leverages the government's balance sheet at a fraction of the cost of grants or tax credits. This enables the deployment of billions of dollars for critical energy projects that create jobs and can drive down costs for consumers, but would otherwise be economically unfeasible or not financeable by the private sector alone. When executed properly, as it has been over the past two decades, the program actually generates revenue for the federal government through interest paid on active loans. In fiscal year (FY) 2023, LPO borrowers repaid a combined $556 million in principal and $484 million in interest to the U.S. Department of the Treasury's Federal Financing Bank (FFB). This model puts the program in complete alignment with the administration's objective of unleashing American energy at minimal taxpayer expense.

The value of LPO to taxpayers is often misunderstood, partly due to the recent resurgence of the program over the past four years. Though most credit the Biden Administration for the reinvigoration of the program, it stems largely from statutory changes made by the 2020 Bipartisan Energy Act, Bipartisan Infrastructure Law (BIL) and Inflation Reduction Act (IRA). These laws expanded accessibility to the program by reducing fees, clarifying terms that had previously restricted lending to industry sectors that could not obtain fixed-price, long-term power purchase agreements, and introducing new programs that increased the office's authority to finance clean energy and infrastructure projects. By the end of 2024, the office had announced 53 deals totaling nearly $108 billion in committed project investments while cultivating a robust pipeline of applicants. At the start of President Trump's second term, over 160 applicants were seeking more than $200 billion in loan proceeds to develop their projects, many of which align with the Trump Administration's recent EOs on energy.

During his reelection campaign, President Trump hinted at rolling back elements of the BIL and IRA, which presumably includes LPO. However, the president has shown interest in the program before. Near the end of his first term, he took steps to support LPO, signing an EO in September 2020 that expanded the office's Advanced Technology Vehicle Manufacturing (ATVM) Program to promote onshoring supply chains, particularly for critical minerals. Shortly after, in December 2020, LPO issued guidance encouraging companies to apply for loans for projects aimed at producing, processing and recycling critical minerals.

To date, President Trump has appointed leadership to review LPO and ensure it continues to meet its goals over the next four years. Lane Genatowski, former director of the Advanced Research Projects Agency-Energy (ARPA-E), has been selected to lead LPO. Genatowski's experience at ARPA-E – where he supported breakthrough technologies such as nuclear fusion, a policy priority for DOE Secretary Chris Wright, and developed the ARPA-E Seeding Critical Advances for Leading Energy Technologies with Untapped Potential (SCALEUP) program – positions him well to advance LPO's mission and support the Trump Administration's energy goals. His selection comes on the heels of former LPO Director John Sneed's evaluation of the program and signals the administration's commitment to using LPO for energy innovation and technological advancements, utility infrastructure deployments that decrease rates for taxpayers and onshoring critical mineral development.

The following sets forth what to expect for projects at each stage of the LPO process throughout the remainder of 2025 and beyond.

Existing Conditional Commitments and Closed Loans: LPO's Commitment to Existing Investments

In March 2025, President Trump reaffirmed his commitment to onshoring critical mineral supply chains by signing an EO aimed at boosting domestic mineral production through regulatory streamlining and both private- and public-sector investments. (See Holland & Knight's previous alert, "Key Takeaways from President Trump's Executive Order to Strengthen U.S. Mineral Production," March 26, 2025.) The EO may be leveraged to empower agencies to use unallocated funds to maximize domestic mineral production – including the billions of dollars of lending authority that remain available through both LPO's ATVM and Title XVII Clean Energy Financing programs.

Furthermore, LPO has continued to disburse funds for existing projects. In February 2025, DOE announced a $782 million advance for an alternative jet fuel refinery in Montana – the first significant disbursement by LPO since the implementation of the "Unleashing American Energy" EO, which paused the release of funds appropriated under the IRA and BIL. (See Holland & Knight's previous alert, "DOE Funding Pause Update: Week 4," Feb. 18, 2025.) Additionally, in March 2025, DOE approved a $57 million disbursement under a loan guarantee for a project to restart the Palisades nuclear plant in Michigan. These disbursements represent continued progress for the 28 active conditional commitments and 25 closed loans and loan guarantees made during the Biden Administration.

This ongoing commitment to funding projects is reflective of DOE's broader strategy for LPO. In a February 2025 interview with Bloomberg, Wright noted that LPO's uncommitted funds would continue to be allocated in a matter that advances President Trump's agenda while ensuring the office will comply with the law on the awards it has inherited.

Furthermore, following President Trump's recent EO placing coal at the center of the administration's plans to reclaim energy dominance, Wright announced a series of actions DOE is taking to unleash coal production. This includes making $200 billion in low-cost financing from LPO's Energy Infrastructure Reinvestment (EIR) Program available for coal energy investments, including upgrading energy infrastructure to restart operations or operate more efficiently.

Looking Ahead: Current and New Applicants

The "Unleashing American Energy" EO, which mandates a 90-day pause on the disbursement of funds from the IRA and BIL – including those used for loan guarantees – has impacted LPO's operational timeline. As a result, LPO is not currently accepting new applications (Part 1 and Part 2) through its formal submission portal. However, its outreach and business development team continues to engage with both current and prospective applicants to advance their application materials.

This pause has also delayed applicants' ability to proceed from the Part 2 application to due diligence. However, given the actions, public statements and ongoing communications with applicants that fall within the policy priority areas set forth in the "Unleashing American Energy" EO, as well as the new Critical Minerals EO, it is expected that the Trump Administration will continue leveraging LPO to promptly meet its policy objectives.

Navigating the Future Funding Landscape

Though the administration appears set to use LPO to advance critical energy infrastructure investments, future legislative action could result in budget cuts to the office. Industry stakeholders will play a crucial role in ensuring the LPO's continued viability. The greater the number of companies that express interest in LPO's programs, the harder it will be for Congress to scale back or eliminate it. Applicants who take advantage of the current funding pause to engage with the administration and refine their applications will be better positioned to move through the program swiftly once it reopens.

Advocating for the future of LPO will require emphasizing the program's role as the most cost-effective tool for achieving the objectives outlined in President Trump's "Unleashing American Energy" and recent critical minerals EOs. To meet these goals efficiently and minimize taxpayer costs, it is crucial to retain sufficient funding authority within LPO. This includes maintaining funding for various subprograms and a small percentage of the funds allocated by the IRA for credit subsidy costs and program operations. This funding is especially vital to deploy breakthrough technologies such as advanced nuclear and geothermal, which are key to ensuring the U.S. remains a global leader in energy production, infrastructure and innovation. By preserving this small percentage of funding, LPO will continue to benefit taxpayers as loans are repaid with interest. In addition, advocating for protecting LPO's resource capacity will be critical to effectively utilizing this funding.

Holland & Knight's fully integrated legal and policy team has extensive experience supporting applicants and awardees through every stage of the LPO process, from initial application preparation to financial close and beyond (i.e., preserving and protecting companies' conditional commitments or loan awards). For more information on how Holland & Knight's attorneys and advisors can assist in navigating the LPO process or securing future financing, please contact the authors.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.