Trump freezes more than $300bn in US green infrastructure funding

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Donald Trump’s return to the White House has put more than $300bn of potential government investment at risk, US investors have said, as they grapple with the size of his move to choose a state plan. Joe Biden’s heaven.

Within hours of his inauguration on Monday, Trump signed a series of executive orders repealing Biden’s policies, including one that freezes federal subsidies to developers and architects. the foundation.

The affected funds were provided under two of Biden’s signature legislative achievements – the Inflation Reduction Act and the bipartisan constitution – and include about $50bn in Department of Energy loans that have already been approved for applications. some worth $280bn under review, according to a Financial Times analysis. of DOE’s loan portfolio.

“All agencies will immediately stop the distribution of funds” in action, the Trump administration said in an executive order called “Unleash American Energy”.

Among the loans now at risk are a $9bn conditional loan to Michigan-based DTE Energy and another $3.5bn to Oregon-based utility PacifiCorp.

DTE did not immediately respond to a request for comment. PacifiCorp said it is working with the department on loan verification standards.

“If you had grants, loan guarantees, money tied up in an IRA and the money hasn’t come out the door, it’s going to be very difficult to see that money come out under the Trump administration,” said Rob. Barnett, senior analyst at Bloomberg Intelligence.

The executive order was one of several signed by Trump during the overnight blitz after he was sworn in for a second term as president and promised to end Biden’s “Green New Deal” and increase the production of fatty acids.

Trump’s move to freeze funding caused tension in the clean energy sector and signaled his intention to undermine Biden’s industrial policy, particularly his programs to accelerate the energy transition.

“The administration’s directives indicate that federal funding for EV and battery manufacturing will be difficult to access, increasing the risk of lost funding for manufacturing projects already underway,” Shay said. Natarajan at Mobility Impact Partners, a New York-based private equity fund.

The 2021 budget provides $1.2bn to improve the nation’s transportation system, while the IRA provides $370bn in tax credits, grants and loans.

Both programs expanded the Department of Energy’s Office of Loan Programs, which was responsible for providing $400bn to developers and has been a favorite target of Republican attacks.

Traders say they fear another $300bn of future government funding – mostly from the infrastructure bill – will also be frozen by Trump’s move.

Unlike money at the credit bureau, IRA tax credits — the primary form of aid in the law — are unlikely to be affected. Loans have been the main driver of investment, with developers making more than $130bn since the law was passed, according to an FT analysis.

Fearing that Trump would stop paying back the money, Biden officials accelerated nearly $50bn in loan commitments to developers in the weeks after he won the election in November.

Trump also wants to stop the construction of wind farms on federal lands and waters and said he will end “unfair subsidies” for electric vehicles. Shares in Tesla, Rivian, Ørsted and other EV and wind companies fell on Tuesday.

This week Italian cable maker Prysmian Group said it was canceling plans to build a factory in Somerset, Massachusetts, which would have made cables for the offshore wind sector.

Some investors had already scaled back their plans for US renewable energy in the US before Trump returned. German energy giant RWE announced in November that it was scaling back its US wind power projects.

About 25GW of offshore wind projects, 65 percent of US projects in development, are unlikely to proceed under the Trump administration, Rystad Energy said on Tuesday.

“When you start to make it look like there’s a lack of stability in the funds that you thought you were doing in the US, that has a very negative impact, long term, on our ability to attract money,” he said. said Eli Hinckley, a partner at Baker Botts.

Additional reporting by Claire Bushey, Christian Davies, Harry Dempsey, Kana Inagaki, Laura Pitel, Rachel Millard, Attracta Mooney, Stephen Morris, Patricia Nilsson