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August 23, 2010
Introduction to USA Energy Advisors
We are Ohio-based: A subsidiary of Columbus-based Value Recovery Group with Offices in Columbus, St. Louis and Washington DC
For Government Agencies: USAEA designs and manages State and Federal advanced energy incentive and related financial programs. Our services include program design, financial and technical underwriting, back office support, marketing support, project and program management.
For Private Entities: USAEA provides economic development and site selection advisory services, project development management services, grant writing, incentive negotiation services, public and private finance assistance and government and community relations assistance.
Advanced Energy in Ohio• Business Investment Leadership
– For the past five years, Ohio has been among the leaders in business expansion. Ohio’s renewable energy industry supported over 6,600 jobs and generated nearly $800 million in revenues.
• Research and Development Leadership– Ohio’s private sector spent $5.9 billion on R&D
• Ohio’s Commitment to Green Energy– Ohio's Renewable Portfolio Standard (RPS) requires that 25 percent of Ohio electricity sales
must come from advanced energy sources by 2025, with at least half of this from renewable sources and half from sources located within Ohio.
Overview• Governor Ted Strickland signed a $1.57 billion bipartisan jobs stimulus package
(HB 554) on June 12, 2008
• Creating an $84 million Advanced Energy (non-coal) stimulus program to:– Attract new investment and create jobs– Focus on industrial applications (not research and development)– Build upon Ohio’s manufacturing strengths– Advance energy technology development towards full commercialization
Overview• Target industries & Programs:
– Solar– Wind– Generation III Nuclear– Hydro– Biomass– Energy Efficiency (Commercial/Industrial)– Distributed Generation– Energy Storage– Fuel Cells– Waste Conversion Technologies– Energy Demand Reduction
Overview
• Administered by the Ohio Air Quality Development Authority– Issuing approx $28 million in awards each year, for three years– Awards will range from approximately $300,000 to $3 million
• Typically based on size and scope of project and job creation– Loans may have possible principal (up to $250,000)
forgiveness if job creation benchmarks are achieved– Awarded through a formal application and review process – Below market rates of with terms ranging 3 – 7 years
Overview of Loan Terms and Conditions
– Financing is only for fixed assets• Fixed assets must be operational before loan can be disbursed
– Take out financing• Single or multiple disbursements are allowed
– OAQDA requires a first lien or shared first lien position– Guarantees may be required– Prevailing wage applies
Application and Award Process• Schedule: Open – applications considered as long as funds are available
• Pre application: Screen for compliance and completeness (LOI format)
• Application and Validation– Criteria that meet State of Ohio goals– Performance measures to guide applicants– Review and recommendation to OAQDA staff
• Statutory Approval Process– Approved by:
• Development Financing Advisory Council• Ohio Air Quality Development Authority• Controlling Board
Algae bio-fuel development
Guiding Principles
1. Workforce Impact: – New, Full-time, Permanent Jobs– Construction Jobs – Economic Impact of Jobs– Advancement Opportunities
2. Leverage: – Private Investment– Public Investment
3. Tipping Points: – Progress in Development (Preferably from demonstration to the commercial stage)– Project Viability (Technology, Financial, Business)– Break-through Potential
4. Strategic Positioning: – Attracting New Investment– Building upon Existing Manufacturing Strength– Reclaiming Ohio's Heritage of Innovation– Preparing Ohio's Workforce for the Future– Expand Opportunities to New Groups/Areas
Select Projects• Ohio Cooperative Solar
– Project: Owner/Installer Solar Panels– Jobs: 20– Loan: $1,530,000
• Technology Management Inc.– Project: Fuel Cells– Jobs: 42– Loan: $2,537,500
Select Projects• Wayne Trail Technologies
– Project: Lithium-ion Battery Mfg System– Jobs: 37– Loan: $838,440
• Xunlight – Project: Thin-film Solar production– Jobs: 181– Loan: $4,060,000
Award Criteria Guideline
• Jobs• Timing of Jobs• Wages • Cooperative Work Opportunities• Supply Chain Position• Product Risk• Customers• Sustainable Advantage• Leverage• Secondary Job Creation• Other Investment Impacts• Financial Strength
• Management Strength
• Technical Expertise• Company History• Carbon Reduction• Energy Independence• Corporate Environmental Stewardship• Environmental and Energy Utilization Impacts• Speed to Market• Non-traditional Partners• Prior or Complimentary Support from the
State of Ohio• U.S. or International Investment in Ohio
http://www.ohioairquality.org/advanced_energy_program/ See “Award Criteria Guideline” at the OAQDA Website for Full Description
Other Resources State of Ohio: Ohio Energy Gateway Fund
An innovative pilot program combining Federal, State and matching private dollars. – $40 million public funding matched by minimum $40 million
private funding– Create a privately managed revolving investment fund for
advanced energy companies in Ohio
Goal– Create jobs and further develop Advanced Energy in Ohio– Managed by professional investment manager– Announcements in June 2010 regarding full roll-out of fund– Support current Ohio businesses and attract new companies to Ohio– Fund will look to redeploy capital returned to create an Evergreen Fund
Ohio Energy Gateway Fund Investment Profile
– Growth stage Advanced Energy companies ready for commercialization• Build domestic sources of advanced energy technologies • Expand production in emerging energy companies • Facilitate improvements that yield energy efficiency • Expand advanced energy power production
– Equity investment to the company
– Number of Transactions - The State expects that no fewer than twelve (12) first-round investments will be made into Ohio-based advanced energy projects.
– Timing of Investments – Investment Manager must commit 40% of all public funds under its management to an Ohio-based investment portfolio within twelve (12) months from commencement of the Fund award. The remaining 60% must be invested no later than April 30, 2012
Other Resources
Ohio Dept of Development: Innovative Ohio Loan Program
The Innovation Ohio Loan Fund is intended to supply capital to Ohio companies having difficulty securing funds from conventional sources due to technical and commercial risk factors associated with the development of a new product or service.
Targeted Industry Sectors:– Advanced Materials; Instruments, Controls and Electronics; Power and Propulsion;– Biosciences; and Information Technology.
Terms:– Fixed interest rate at or below private sector loans for comparable levels of risk
(typical prime plus 2%).– Typically 4 to 7 years– Can finance up to 75 percent of a project’s allowable costs, maximum of $2 million
and a minimum of $500,000.
Other ResourcesOhio Dept of Development: Research & Development Investment Loan FundThe R&D Fund can be used to aggressively pursue research and development operations and facilities and to fund the cost of capital purchases.
Eligible Projects – Research is undertaken for the purpose of discovering information that is technological in
nature, and the application of which is intended to be useful in the development of a new or improved product, process, technique, formula or invention.
– Project employment will be comprised of a significant representation of scientists, researchers and technicians.
Terms– Finance up to 50% of a project’s allowable costs; ranging in size from $1.5 to $25 million– Up to 15 years for real estate and up to 10 years for machinery and equipment.– Interest rates are fixed at/or below market rates and typically do not exceed ½ of prime rate.– Recipients may be eligible for a dollar-for-dollar tax credit, equal to the amount of principal
and interest repaid on the loan. The maximum annual credit is $150,000.
Other Resources
U.S. Department of Energy:– Partial risk-sharing loan guarantees (up to 80% of total loan) to support the debt financing
for renewable energy generation systems – 1705 Commercially Available Technology for Energy Generation (Financial Institutions
Partnerships Program (FIPP)– 1703 Innovative Technologies Ready to Proceed to Commercialization in US – Small and Medium Projects Initiative– Large Manufacturing – Recently Announced– Online application portal – https://www.doeloan.com
Goals:
1. Power Generation
2. Job Preservation and Creation
3. Innovative Technologies
4. Infrastructure Investment
5. State and Local Stabilization
6. Energy Independence
Contact Us• www.ohioairquality.org
– OAQDA Help Desk Phone line: (614)-246-9726– [email protected]
• www.lgprogram.energy.gov– DOE Help Desk Phone line: (614) 324-5940– [email protected]
USA Energy Advisors
919 Old Henderson Rd.
Columbus, OH 43220
(614) 324-5949
http://www.usaenergyadvisors.com/