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Loan Guarantees for New Nuclear Plants
The bill authorizes the energy secretary to provide loan guarantees to support the development of innovative energy technologies “that avoid, reduce or sequester air pollutants or anthropogenic emissions of greenhouse gases.”

These technologies include nuclear energy facilities, renewable energy, coal gasification and hydrogen fuel-cell technology. The loan guarantee can be up to 80 percent of the project cost. The secretary sets the rate, and full payment must be made within 30 years or 90 percent of the project’s life.

The legislation creates a self-financing Energy Loan Guarantee Fund that minimizes the potential costs to the federal government. The legislation provides two alternatives to finance the cost of a loan guarantee:

• The project developer can pay the cost of the loan guarantee into the fund.
• The secretary of energy can request an appropriation for that amount, and the project developer pays back that amount over time.

The cost of a loan guarantee is a small percentage of the face value of the amount being guaranteed, much like the loan origination fee charged by a bank when it provides a home mortgage.