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Replies to post #85844 on Niocorp Developments Ltd (NB)
Office of Clean Energy Demonstrations: Once the technology has been de-risked, companies enter the next “Demonstration” Valley of Death to prove out market and commercial validation.
DOE’s latest new Office of Clean Energy Demonstrations sports a fresh $20B to support demonstration projects across clean hydrogen, carbon capture, advanced nuclear reactors, grid-scale energy storage, and grid updates. “OCED has a clear role in commercializing clean energy technologies and filling a critical innovation gap on the path to achieving our nation’s climate goals. We will validate these technologies in real-world conditions and provide confidence that the technology works as intended,” explains Kelly Cummins, OCED’s Acting Director. The office will look to develop clean energy demonstration projects with organizations - including tech developers, EPC firms, utilities, and local governments - to accelerate market adoption and unlock private sector follow-on funding.
Deployment | You’re on the bridge to bankability
Loan Programs Office: After navigating past and proving demonstration-scale, it’s time to scale fully to commercial-level deployment. Often at this stage, operators face the chicken and egg dilemma where no financiers are willing to fund the first commercial-scale project - as experienced firsthand by Rob Hanson from Monolith in our previous interview, “raising $40-50m for a pilot with a lot of promise is relatively easy. Raising $100-300m for a commercial unit, which doesn’t have great economics on its own, is much harder.” Big banks and lenders demand “bankability”, which only comes with proving project scalability and replicability.
(***Niocorp appears to be on the way to proving out "Final Demo/Hydromet workings! & has almost completed raising the Equity portion. T.B.D.)
The DOE’s Loan Programs Office is open for business and ready with $40B to back large-scale energy projects. Says LPO Director Jigar Shah, “There are many areas that are mature from a technology standpoint but not mature from an access to capital standpoint — that’s a nexus where there’s a clear mandate for LPO to participate.”
CRITICAL MATERIALS Loan Programs Office
https://www.energy.gov/lpo/critical-materials
(***Monies are available for Critical Minerals projects. MP materials & Lynas have received upwards of $150M each)
The LPO has a unique suite of capital within the broader ecosystem, with a mandate to issue debt vs grants (read: LPO expects repayment). LPO’s loans and loan guarantees are designed to fill the gap in funding commercial deployment, serving as a bridge to bankability for innovative climate technologies before private lenders are willing to step in. Startups that make it through the LPO’s intensive diligence often can come out the other side with a stamp of approval to accelerate raising follow-on private sector funding. Currently, LPO’s authority consists of billions across three programs: Innovative Clean Energy (Title 17), Advanced Technology Vehicles Manufacturing, and Tribal Energy.
Announced projects so far:
Advanced Clean Energy Storage, which would be the largest clean hydrogen storage facility in the world, capable of providing long-term low-cost, seasonal energy storage, furthering grid stability.
Monolith, which would be the first-ever commercial-scale project to deploy methane pyrolysis technology, which converts natural gas into carbon black and hydrogen — two products that are frequently used in difficult to decarbonize industrial sectors like tire and ammonia fertilizer production.
Syrah Vidalia and Ultium Cells, which would help scale-up processing of critical materials and lithium-ion battery cell manufacturing, respectively, in the US to meet the growing demand for EVs.
Ways to engage:
The LPO’s goal is to engage early and often, so if you’re thinking about deployment dollars, start by reaching out to the Outreach and Business Development team. From there, the team brings together internal experts spanning across financial, technical, legal, risk, and environmental expertise, to help borrowers move through the process from consultations, due diligence, and underwriting (led by LPO’s Origination Division). After loan closing, LPO’s Portfolio Management Division stays the course to help with construction, project operation and maintenance, and eventual final loan repayment. (Oh yeah, there’s that!)
Categories, caveats, cheats, and considerations
A healthy warning that public DOE and private VC funding are not created equal. (More in our Climate Capital Stack guide). Where venture funding specifically seeks an outsized, time-bound return, public funding is purposefully catalytic in addressing funding gaps for climate solutions. Naturally, government funding is typically non-dilutive with different flavors and caveats that come with it.
Categories of DOE funding - not one size fits all
Grants & Awards: non-dilutive capital to support specific technologies, research activities, and projects, which can range from smaller prizes to large cost-shared infrastructure investments
Loans & Loan Guarantees: debt capital as the sole lender or co-lending with guarantee loans from private lenders (e.g. promise to repay if the borrower defaults)
Financing: funding and technical assistance to states & territories to enhance state-led energy security, initiatives, and affordability
Procurement: power of the government purse through early purchases or offtake agreements, guaranteeing future revenue.
We are currently examining whether or not NioCorp’s Elk Creek Project would qualify for DEBT financing under the DOE LGP program.
Thx,Jim
...Apart from this bill’s proposed provisions, We have been working with several federal agencies regarding potential assistance to the Elk Creek Project, but those agencies do not allow us to disclose any details of those processes.
All the best, Jim
