Applicants submit the Part I Application in response to the solicitation requirements. A Part I Application explains the applicant’s proposed method of achieving the technical, budget, personnel and project scheduling requirements of the solicitation. To learn how to create the best possible application, see the Suggestions for Strong Loan Guarantee Applications.
Once the Part I Application is received, the Department conducts an initial review to determine the applicant’s response to the criteria set forth in the solicitation. Proposals determined to be non-responsive to the requirements of the solicitation are provided the opportunity to submit additional and/or supporting materials that address the Department’s feedback. Proposals that do not qualify are removed from consideration, and the submitters are notified in writing of the decision. Applicants are welcome to update or resubmit a project as a new application.
Applicants that pass the initial eligibility requirements will be given guidance to assist in their decision whether or not to submit a Part II Application. A Part II Application provides the basis for a much more comprehensive due diligence review. Due diligence consists of a thorough review from the Department and independent consultants of a project’s financial, technical, regulatory, and legal strengths and weaknesses, along with a market analysis and environmental review. During the environmental review, projects are also evaluated for their compliance with the National Environmental Policy Act (NEPA), the Endangered Species Act (ESA), and other state and local environmental laws and regulations.
Toward the end of the application process, the Department negotiates the terms of the loan guarantee with the applicant and, after a series of reviews and approval, will offer a term sheet. If the term sheet is accepted, it becomes a conditional commitment. The term “conditional commitment” is defined in the Final Rule. Generally, a conditional commitment sets forth the major terms of a proposed loan guarantee and certain conditions that must be satisfied prior to issuance of the loan guarantee. The Secretary may terminate a conditional commitment for any reason at any time prior to issuance of the loan guarantee.
Following issuance of a conditional commitment, the parties will negotiate definitive loan and project documentation, and the borrower/sponsor must satisfy all statutory, regulatory, programmatic and other specified conditions precedent to issuance of a loan guarantee and/or funding the loan.
To better understand the attributes of a well-crafted application, please click here.