On September 30, 2014, the Department of Energy’s Loan Program Office (“DOE”) announced the Draft Advanced Nuclear Energy Projects Solicitation (“Draft Solicitation”) for its up to $12.6 billion loan guarantee program under Section 1703 of Title XVII of the Energy Policy Act of 2005. The program provides long-term financing for innovative broadly-defined advanced nuclear projects that reduce greenhouse gas (“GHG”) emissions and are located in the United States.

The Draft Solicitation may be accessed by clicking here: http://1.usa.gov/1ptknjk.

DOE will consider comments in defining the scope of the final solicitation. The comment period will be open until October 29, 2014.

Project Eligibility

Under this Draft Solicitation, DOE is seeking to support innovative advanced nuclear energy projects that meet the following eligibility criteria:

  • be located in the United States;
  • be an advanced nuclear energy facility, which includes the use of the following technologies:
    • nuclear fuel cycle “front-end” technologies:
      • uranium conversion;
      • uranium enrichment; and
      • nuclear fuel fabrication;
    • nuclear power facilities:
      • nuclear reactors;
      • small modular reactors;
      • uprates;
      • upgrades;
  • avoid, reduce, or sequester anthropogenic emission of GHG;
  • employ New or Significantly Improved Technologies, as compared to Commercial Technology in service in the United States, at the time the term sheet is issued, as these terms are defined under 10 CFR Part 609;
  • provide a reasonable prospect of repayment of the principal and interest on the guaranteed obligation and other project debt;
  • have sufficient funds to carry out the project; and
  • not benefit from certain other federal assistance, as described more fully herein.

A technology will be considered Commercial Technology if it is in general use in the commercial marketplace in the U.S. at the time the term sheet is issued by the DOE. A technology will be considered in general use if it has been installed and is used in 3 or more commercial projects in the U.S. in the same general application as in the proposed project, and has been in operation in each such commercial project for at least 5 years by the time the term sheet is issued.

A New or Significantly Improved Technology is a technology that is not a Commercial Technology, and that has been: (i) only recently developed, discovered, or learned; or (ii) involves or constitutes meaningful and   important improvements to the Commercial Technology in use in the U.S. at the time the term sheet is issued. 


This Draft Solicitation is intended to solicit applications in the following advanced nuclear energy technology areas:

“Front-End” Nuclear Fuel Cycle Facilities

  • Uranium conversion
    • Projects that economically convert U3O8 powder into a gaseous form of uranium hexafluoride with reduced GHG.
  • Uranium enrichment
    • Projects or facilities that transform natural uranium or uranium tails to a higher isotopic content of U235 by:
      • Gas centrifuge; or
      • Laser isotope separation.
  • Nuclear fuel fabrication
    • Projects that fabricate nuclear fuel, such as:
      • Production of UO2 powder that is “reconverted” from enriched UF6 gas from enrichment plants;
      • Formation of UO2 pellets from UO2 powder through compaction and sintering;
      • Fuel assembly (i.e. insertion of pellets into zircaloy tubes and formation of a fuel assembly using fasteners); and
      • Production of nuclear reactor components, such as reactor vessels, steam generators, coolant pumps, control rod mechanisms, valves, heat exchangers, instrumentation and controls, and any other equipment involved in utilization and control of nuclear fuel assemblies in a nuclear power facility.

Nuclear Power Facilities

  • Nuclear reactors
    • Projects with state-of-the-art design improvements in the areas of fuel technology, thermal efficiency, modularized construction, safety systems (especially the use of passive rather than active systems), and standardized design.
  • Small modular reactors
    • Projects with state-of-the-art design  improvements  in  the  areas  of  fuel  technology, thermal efficiency, modularized construction,  safety  systems  (especially  the  use  of passive rather than active systems), and standardized design and are nominally 300 MWe or smaller in size.
  • Uprates
    • Projects consisting of improvements and/or modifications to an existing reactor that is operating but that, due to such improvements and/or modifications, will operate more efficiently.
  • Upgrades
    • Projects consisting of improvements and/or modifications to an existing reactor that is:
      • Not   operating   and   cannot   operate   without   such   improvements   and/or modifications; or
      • Operating but would be required to cease operating unless such improvements and/or modifications are made.

Of the total $12.6 billion in funds available under this Draft Solicitation, $2 billion will be made available exclusively for advanced nuclear facilities for the “front-end” of the nuclear fuel cycle and $10.6 billion will be made available for nuclear power facilities.

To foster further development of advanced nuclear energy technology, DOE will view favorably projects that demonstrate their catalytic effect on the commercial deployment of future advanced nuclear energy projects that replicate or extend the innovating features of such eligible project.

The Draft Solicitation identifies the following two types of projects that DOE has determined will have a catalytic effect: (i) projects that incorporate advanced nuclear reactor designs; and (ii) facilities that employ innovative fabrication techniques and processes, or fabricate nuclear fuel for advanced nuclear power facilities. However, these types of projects or facilities are not intended to be limiting or exclusive.

DOE does not prescribe any Nuclear Regulatory Commission (“NRC”) licensing requirements as preconditions for project eligibility. However, any required NRC licenses will be addressed by conditions precedent in the project’s loan guarantee agreement. Prior to execution by DOE of a loan guarantee agreement, the applicant must filed for, or have obtained, any required regulatory approvals for the project.


Under the Draft Solicitation, DOE makes available $12.6 billion in loan guarantee funds authorized and already appropriated by the Omnibus Appropriations Act, 2009, P.L. 111-8, as amended by Section 408 of the Supplemental Appropriations Act, 2009, P.L. 111-32 (“2009 Appropriations Act”).

The program is not subject to any statutory or regulatory dollar limit for any single project. However, DOE views favorably the use of partial guarantees, co-lending arrangements, and projects that could be fully financed on a long-term basis by commercial banks, internally generated corporate funds, or other commercial means without a federal loan guarantee. Loan guarantees can support debt from either a commercial or other qualified lender or the Federal Finance Bank at the U.S. Department of Treasury, where lenders will not finance such projects without a credit enhancement such as a federal government loan guarantee.

Loan Guarantee Percentage of Project Cost

Under the regulations (42 U.S. Code 16512 (c)), DOE may provide a loan guarantee of up to 80% of the total project costs, without a cap, but subject to available program funds.

In practice, however, most projects receive loan guarantees at a maximum of 65% or a lesser percentage of the total project costs. In fact, historically, DOE has not guaranteed more than 70% of the total project costs.

Notwithstanding the level of a DOE loan guarantee, the remaining balance of project costs must be funded by equity (including tax equity, such as Investment Tax Credits and New Market Tax Credits), state grants, subordinated debt, and other financing mechanisms.

Other Federal Assistance

Projects that benefit directly or indirectly from other forms of federal support, such as grants or other loan guarantees from federal agencies or entities, federal contracts, acquisitions, leases, and other arrangements may not be able to receive funds under this Draft Solicitation pursuant to the 2009 Appropriations Act, subject to limited exceptions.

Credit Subsidy Costs

DOE has no available funds to cover the credit subsidy costs associated with this Draft Solicitation. Like in the Advanced Fossil Energy Loan Guarantee Program, the applicant will be expected to bear the full credit subsidy costs, which cannot be covered under this program’s loan guarantee or any other federal government funds. As such, the applicant must commit additional funds above and beyond the equity already committed to the project.

Credit subsidy costs are non-refundable and due and payable at financial closing.


Each applicant must pay non-refundable application fees, facility fees, and maintenance fees, as summarized below. These fees must be borne by the applicant and cannot be covered under this program’s loan guarantee or any other federal government funds.

Application Fee

The total application fee for the application is targeted at between $150,000 and $400,000, payable in two installments, as follows:

Click here to view the table.

Facility Fee

The facility fee ranges from 1% to 1.6% of senior debt, depending on the amount of senior debt:

Click here to view the table.

The facility fee is payable in two installments: 25% upon the applicant’s execution of a DOE-approved term sheet, and 75% upon financial closing.

Maintenance Fee

The maintenance fee covers DOE’s administrative expenses in servicing and monitoring the loan guarantee, starting with the borrower’s execution of the loan guarantee agreement and through payment in full. It is expected to be up to $500,000 per calendar year, based upon the requirements of a specific project. The maintenance fee is payable annually in advance.

Application Process

The application consists of two submissions, Part I and Part II. Part I submission determines the initial eligibility of a project for funding, while the Part II submission includes completion of the full application and due diligence process. Only applicants for projects that are deemed eligible based on DOE’s Part I review may be invited to submit Part II of the application.

  • Part I review will include an evaluation of whether the project is responsive to the requirements of the Draft Solicitation.
  • Part II review will include a determination of the project’s viability based on financial, technical, and programmatic factors. DOE will conduct a more detailed, weighted review of a Part II application, which will include thorough due diligence of the project.

Viable projects that are granted a conditional commitment will then undergo the complete underwriting process and negotiation of terms for the loan guarantee.

Applicants may submit applications online through an application portal from DOE’s website, at www.loanprograms.energy.gov.

Application Deadlines

No application deadlines were announced in the Draft Solicitation.