The U.S. Department of Energy (DOE) on Feb. 12, 2025, announced a $782 million first advance under a $1.67 billion loan guarantee for the development of sustainable aviation fuel from the Loan Programs Office (LPO). This marks the first significant disbursement to a DOE loan or grant project since President Donald Trump signed the Unleashing American Energy Executive Order, which paused the release of federal funds appropriated under the Inflation Reduction Act and Infrastructure Improvement and Jobs Act – including DOE loans and grants.
For other loans and grants, DOE stated that it is "continuing to conduct a department-wide review of all funding, including grants and loans, to ensure all activities are consistent with the law and in accordance with President Trump's executive orders and priorities."
Before the announcement, U.S. Energy Secretary Chris Wright shared his approach in a Feb. 11, 2025, recorded interview with Bloomberg, a transcript of which reads in part: "The first thing I'm doing from the Day One I walked in the office is to understand what is our existing loan portfolio, who do we have loans out [to], what are the terms under which they are, which projects are mid-way, which projects haven't launched yet? So, I've got to follow the law and manage what I've inherited. And then there are a lot of monies uncommitted or early on and, of course, those will be deployed to advance the President's agenda of affordable, reliable energy."
When asked specifically if he would cancel loans that are already in place, such as those issued by the Biden Administration, Wright reiterated: "We will follow the law." (The quoted portion starts at ~9:49.)
Despite these reassurances, it is clear from the interview and recent DOE announcements – including a recent Secretarial Order – that each project will continue to face strict scrutiny before funds are released. Just days prior, a judge ruled that the Trump Administration is still improperly withholding funds, violating the court's temporary restraining order (TRO). It's important to note, however, that this disbursement seems to have been released not due to the TRO, but because the DOE – likely with the White House's approval – had completed its review and was comfortable moving forward with the project.
In practical terms, and in line with previous Holland & Knight guidance, it's crucial for clients to ensure they're meeting all terms of their grant award or loan agreement and expand the congressional and executive branch support for their projects. Any contractual deviation or misalignment could provide government officials a reason to delay payments or withhold funds.
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