Issue Brief | Loan Guarantee Provisions in the 2007 Energy Bills: Nuclear Power Risks & Liabilities

Loan guarantees are used by the federal government to promote key areas of industry and encourage commercial development. By offering a guarantee on a loan, the federal government provides financial security for borrowers in sectors that are often considered too risky for lenders. The Government Accountability Office (GAO) says, “Federal loan guarantee programs help borrowers get credit from private sector lenders—the federal government guarantees to pay lenders if the borrowers default on loans, which makes extending credit more attractive to lenders.”1 Title XVII of the Energy Policy Act of 2005 (EPACT 05, P.L.109-58), gives the Department of Energy (DOE) authority to offer loan guarantees for new and innovative technologies that avoid, reduce, or sequester air pollutants or anthropogenic emissions of greenhouse gases and are not currently in commercial use for energy production. Eligible technologies include renewable energy, energy efficiency, advanced nuclear and fossil, and carbon capture and sequestration, to name a few. 

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