Deploy! | March 15, 2024

Tribal community gets Energy Department loan guarantee for solar + storage

Jessica Pothering and Amy Cortese
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha Editor

Amy Cortese

The future of energy access runs through locally-led and inclusive businesses. Indigenous-owned renewable energy developers in the US are getting their first cut of capital from a dedicated funding pool for tribal communities under the Inflation Reduction Act.

The US Department of Energy’s Loan Programs Office is providing a partial guarantee of up to $72.8 million to Indian Energy for a solar mini-grid plus storage project to serve the Viejas Band of the Kumeyaay Indians near Alpine, Calif. It’s the first commitment from the $20 billion federal Tribal Energy Financing Program, which provides direct loans and guarantees to tribal entities for clean energy projects.

Just transition

Up to 14% of Native households living on tribal lands in the US lack access to electricity, according to the most recent federal survey (which is 24 years old). Recognizing the need to support tribal communities in the green transition, the Biden administration added $18 billion to the 32-year-old Tribal Energy Financing Program.

The administration earlier this month also announced more than $72 million to 21 tribal entities through the Tribal Electrification Program. The funding will support clean energy project development and electricity distribution to off-grid homes.

The Biden administration’s Justice40 Initiative aims for 40% of federal climate investments to benefit underserved and disadvantaged communities.


Federal funding is catalytic. Investors that co-invested with the Loan Programs Office since its inception would have seen a 10% internal rate of return across the portfolio; the top-quartile of deals would have returned 23%, according to an investor pitch deck shared by LPO chief Jigar Shah.

The IRA’s tax credits, grants and loans “are focused on triggering a tsunami of private sector financing for commercial deployment of clean energy technologies” by 2030, says the LPO.

The lending arm of the Energy Department employs an armada of risk assessors; the loss rate on the $39 billion in loans and guarantees it has extended is just 3.1%.