The DOE through Secretary Chu’s leadership has streamlined the evaluation and approval process for direct loans and loan guarantees for energy projects such as coal gasification plants.

Department of Energy Secretary Chu has made changes to the project application review process that are designed to shorten the time that is necessary to get loan guarantees for energy projects approved. The DOE announced a solicitation for loan guarantees for coal gasification plants on September 22, 2008. The changes are described as broad based organization structure and process changes that are aimed at reducing the length of time the DOE requires before approving direct loans and loan guarantees for energy projects.

Secretary Chu said that the purpose of these changes is to move forward quickly with funding for projects that will put Americans back to work and reduce the United States dependence on foreign oil imports. Secretary Chu has been personally involved in the review of DOE procedures for approving direct loans and loan guarantees.

Secretary Chu’s reforms to the programs include:

Rolling appraisals of applications – instead of delaying the consideration of an application until a far off deadline, the Department will review them when they are submitted so that decisions can be made more quickly.

Streamlining and simplifying loan application forms and other paperwork.

Accelerated loan underwriting by using outside partners.

In cases where up-front fees may deter companies from applying, the Department will offer applicants the opportunity to pay the fees as part of the loan at closing.

Further reduction of up front costs by restructuring credit subsidies so they are paid over the life of the loan.

Additional staff and resources to process applications.

Working with the industry to attract good projects into the loan guarantee program and helping them navigate the process.

A website that will provide increased transparency in both process and results, as well as information to help applicants through the process.

These changes will enable the DOE to issue approval notices for loan guarantees for coal gasification projects with carbon capture and sequestration within months and DOE loan commitments are expected to be issued in April and May 2009.