Chris Creed, Chief Investment Officer, Department of Energy Loan Programs Office
Chris Creed is the Chief Investment Officer of the Department of Energy's (DOE) Loan Programs Office (LPO), the debt lender within the US government for emerging and first-of-a-kind energy and high-impact energy ventures. He manages a portion of the DOE’s $400 billion lending program. Before that, Chris spent over 23 years as a Managing Director at Goldman Sachs in fixed income activities, and he considers Columbia University and St. John’s High School in Massachusetts as formative institutions.
“Our vision is a secure and clean energy economy that works for all Americans, and our mission is to be the premier public financing partner to accelerate high-impact energy generation and manufacturing investments here in the United States. So how cool is that?" - Chris Creed
Section 1703 and Section 1706 of the Inflation Reduction Act and the IRA’s Investment Tax Credit (ITC) and Production Tax Credit (PTC) provisions are particularly germane to the LPO’s scope of activities.
“Bridge to bankability” is a recurring phrase with the LPO. The program helps technically proven emerging clean energy programs and decarbonization projects to scale to commercial liftoff. Another role is enabling energy-related domestic manufacturing and supply chains. Examples include the $500MM ACES Delta utility-scale hydrogen storage project, the subject of Episode 33, and multiple battery/EV projects such as $2.3BN for Nevada’s massive Thacker Lithium Mine Lithium, and assistance for GM’s Ultium and Ford’s BlueOval battery efforts. Most famously, Tesla received $465MM from the DOE. All loans need to have a “reasonable prospect of repayment.”
“We do very intense credit diligence on all of our projects. One of the things that I'm the most proud of is the work that our deal teams do. We produce … work that takes three to 12 months of intense due diligence.” Chris Creed
This serious diligence, and probably a bit of luck, has resulted in an impressive 7% delinquency rate and a 3% default rate. Loans must mature at the earlier of 30 years or 90% of the project life, typically 7 to 14 years. Interest rates are an attractive Treasuries plus 0% to 2%. The loan is capped at 80% of “eligible project costs,” equal to about 60-65% of the more typical loan-to-value metric (with a range of 50% to 80%). Debt service coverage ratios are highly variable. Community benefits are a critical consideration and frequently contribute to the project's financial stability by ensuring skilled labor supply and community support.
Looking forward, Chris and the LPO team want to raise awareness of their work so that companies can understand how to apply and which project are being financed. The DOE publishes “Liftoff” reports at liftoff.energy.gov, and the LPO is part of the group of offices that heavily contributes to these thought pieces.
“The mandate we got from Congress is awe-inspiring. I am unbelievably proud and thoroughly enjoy working with the high-quality caliber of teammate that I get to work with here at LPO." - Chris Creed
