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11/21/2012

Loan guarantees will work- empirical examples
NEI 8
(Nuclear Energy Institute, the policy organization of the nuclear energy and technologies industry, April 2008,
“Financing New Nuclear Power Plants”, http://www.nei.org/filefolder/Financing_New_Nuclear_Power_Plants_0408.pdf
//VR)

The federal government uses loan guarantees widely and successfully to ensure investment in critical infrastructure,
including shipbuilding, transportation infrastructure, exports of U.S. goods and services, affordable housing, and many
other purposes. The government manages a successful loan guarantee portfolio of $1.1 trillion.
The energy loan guarantee program is not a subsidy. Unlike other federal loan guarantee programs, project developers are
required to pay the cost of the loan guarantee, as well as the full cost of administering the program. The program addresses
market imperfections that otherwise would restrict access to capital or impose inordi-nately high financing costs on
projects. The Office of Management and Budget noted that federal credit programs, such as the energy loan guarantee
program, “effectively fill the gaps created by market imperfections.”
The Department of Energy finalized the loan guarantee program in October 2007. According to the final rule, a guarantee
may cover 100 per-cent of the project debt, provided the debt does not exceed 80 percent of the project’s cost. In December
2007, Congress authorized DOE to grant $18.5 billion worth of loan guarantees to new nuclear projects.
Now that the rules and authorization are in place, the industry expects solicitations from DOE for nuclear projects in 2008.
At that time, companies will submit applications and begin to negotiate terms and conditions of the guarantee.

Michigan 7 weeks

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