The latest episode of the IJGlobal podcast service – Infra Dig – sees the spotlight turn on the US Department of Energy’s vaunted Loan Programs Office.
IJGlobal editorial director Angus Leslie Melville pulls up a chair for a fireside chat with Chris Creed, chief investment officer at the LPO, to hear all about the organisation’s plans for the future.
In a recording that lasts around 34 minutes, Chris lifts the lid on the LPO, explaining how it is doing business while giving the listener an insight into plans for the future.
The LPO is a US government entity with more than $300 billion of lending capacity for emerging and first-of-a-kind energy projects, as well as other high-impact energy-related ventures.
Chris says: “I love the mission that we have to catalyse the American economy through investments in clean energy and energy infrastructure, having the opportunity to genuinely make a difference in what I believe is going to be one of – if not the – most catalytic components of the US and global economy for the foreseeable future.”
Having been in the CIO role for more than 2 years now, Chris is 100% behind the role that the LPO is – and will continue to play – in having an impact on energy generation across the US.
“There are a number of different macroeconomic issues that are in play,” says Chris. “Interest rates are higher than they were over the past 5-6 years and the ability for the LPO to lend at US Treasuries plus 0-200bp – depending on the programme, risk of the loans and other factors – is meaningful.
“It was meaningful 2 years ago when interest rates were lower, but it is arguably more meaningful today as the cost of borrowing is pretty high.”
Christ continues: “One of the things that we are noticing is that as capital is slightly more constrained, and the ability of projects to land is more constrained, we are seeing more and more companies look to us as a source of debt capital.
“More than that, we have additionality and an objective to help bring about an increase in investments in the clean energy space, an acceleration in the commercialisation of a lot of these technologies. The metaphor that we often use is that we need to cross this bridge to bankability from demonstrated innovative technology that works to full market acceptance where the projects are readily bankable.”
To hear all about the LPO plans and a frank discussion on the plans to drive investments on the ground, tune into this latest episode.