Government-Creditor Agreement

To facilitate project success, it is necessary to mobilize private sector investment, including debt, in projects funded by the U.S. Department of Energy (DOE). An item DOE is addressing to enable private capital is DOE’s tangible property interest in connection with its financial assistance awards.

DOE has developed a standardized Government-Creditor Agreement (GCA) which, among other things, provides clarification on lenders rights and remedies with respect to DOE’s interest in the property, and expectations and other reasonable protections in a DOE-funded project.

On October 21, 2024, DOE released the GCA for public comment. The aim of the public comment period was to receive questions and clarifications regarding specific provisions in the GCA, and additions or variations that, without change, would potentially prevent lenders from participating in financing a project that includes a DOE financial assistance award.

DOE received more than 150 comments from DOE financial assistance recipients, law firms and investors. The revised GCA reflects this market feedback where DOE received consistent feedback and reflected the nature of the DOE-lender relationship and the restrictions contained in the financial assistance regulatory framework and other law.

Documents

• Revised Government-Creditor Agreement
• Summary of the Comments Received on the Government-Creditor Agreement
• Government-Creditor Agreement Redlines to Version Released for Public Comment
• User’s Guide to DOE’s Property Interest in DOE Financial Assistance Awards 

Government-Creditor Agreement Overview 

The released GCA is primarily targeted at non-recourse or limited-recourse project financings with a single lender. DOE recognizes that there may be other financing structures and that technical adjustments will need to be made to accommodate these different forms of financings. Following the finalization of this document after the public comment, DOE will develop subsequent versions of the GCA that account for other potential financing structures, such as a syndicate of lenders with a collateral agent, new or existing corporate-level debt, etc. 

Disclaimer

In reviewing the GCA, it is important to recognize that DOE is not a creditor in the traditional commercial sense, which is reflected in the GCA. DOE is familiar with long-form intercreditor and similar agreements and has carefully considered relevant provisions to include in this GCA in the context of financial assistance awards. The GCA should be utilized with this in mind as well as a thorough understanding of DOE’s undivided reversionary interest.