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DOE to Backstop $72 Million Loan for Tribal Solar-Storage Microgrid

The Department of Energy recently said that its Loan Programs Office has granted a conditional commitment for a partial loan guarantee of up to $72.8 million for a solar plus storage microgrid project on Tribal lands in California.

The Viejas Microgrid project on land of the Viejas Band of the Kumeyaay Indians near Alpine will provide utility-scale renewable energy generation and storage infrastructure with the installation of a 15-megawatt photovoltaic solar generation system and a 38-megawatt hour battery long-duration energy storage system.

The Viejas Band will purchase electricity through a subsidiary in a long-term power purchase agreement to help operate various commercial businesses including gaming, hospitality, and retail facilities.

When complete, the project will allow the Tribe to benefit from a lower cost of energy, allowing additional resources to be redirected toward investments by the Tribe in infrastructure maintenance, operation of the fire department, Tribal culture and educational programs, and other Tribal member services, the DOE said in a statement.

The project company is owned by Indian Energy, Turtle Mountain Band of Chippewa, and the Sault Ste. Marie Band of Chippewa Indians. The project developer, Indian Energy, is a 100 percent Native American owned energy development firm. The borrower, IE VEM Managing Member LLC, is a Tribal energy development organization owned by Indian Energy.

The project developers previously received over $30 million in state financial assistance through a grant from the California Energy Commission for the development of the long-duration energy storage system that is designed to provide renewable backup power to the Tribe and support statewide grid reliability in the event of an emergency.

The DOE said that while the conditional agreement demonstrates its intent to finance the Viejas project, several steps remain for the project to reach critical milestones, and certain technical, legal, and financial conditions must be satisfied before the department enters into definitive financing documents and guarantees the loan.

The Viejas project is the first to be offered a conditional commitment through the Tribal Energy Financing Program, which was expanded and provided new loan authority by the Inflation Reduction Act, which, among other things, provides funding for Tribes to plan for and adapt to climate change, according to the DOE.

The DOE also said the Viejas project supports the Biden administration’s Justice40 Initiative, which calls for 40 percent of the overall benefits of certain federal investments, including Loan Programs Office financing, to go to disadvantaged communities, which includes the Viejas Tribal Lands.

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