Jigar Shah

Yeah. Well, I think first we have to recognize that it's a team effort. When President Biden was on the campaign trail, his promise was that America was going to do big things again. This industrial strategy was part of his campaign, right? He went to people on Wall Street, went to entrepreneurs and said to them, I'm going to make it possible for you to do things in this country.

And frankly, I would say the vast majority of people didn't believe him because, you know, those promises have been made before and they were not kept. And he went to the unions and said, look, you are going to have to play a productive role here, right?

I get the fact that change is hard, but you're going to have to figure out how to embrace change and you're going to have to be fervent supporters of this. And I'll also be a fervent supporter of you. But then separately, he went to the environmental groups and said, look,

You're going to have to understand that, like, in order for us to get solar panels to be, you know, something that we want to deploy at 100 gigawatts a year scale, Americans want them made here. And so you're going to have to understand what it takes to be able to deploy things at scale. And then he went to the justice groups. And so, look, I get it, right? You were...

promised a whole bunch of stuff and none of it came true. And so you do not trust the government. You do not trust these large industrial deployments, but let us come up with a process to earn your trust, right? And we have done that with all of our loans.

And so while the private sector is essential to this, and then the loan programs office, you know, receives a loan application and then actually just provides a loan right after, you know, a lot of due diligence, etc., The ingredients for Americans thinking that we could do big things again was a team effort.

And you see that in states around the country who are now competing ferociously to attract these projects to their states, right? And it's not an economic development story in terms of like who's giving you the biggest package. It's how do we get trained workers? How do we make sure that the infrastructure is there?

How do we build up new electricity, transmission lines and new facilities to be able to accommodate all this load growth, right? You know, so that is something that's more of an art than a science, right? Which politicians are better at than I am.

But today I'm getting people calling me saying like, Jigar, I would have never in a million years thought that we could do big things in this country, but I think we can.

So if we look at Thacker Pass, which is a big lithium production facility in Nevada, they had to go through permitting. They had to go through NEPA. We made their process as smooth as we could. And frankly, my team did an extraordinary job there. But the big thing is that, remember, when we came into office, lithium was very high priced because there was a shortage.

But there's no shortage of lithium in the world. It was just the processing facilities were short. Since the market's been flooded with lithium, lithium prices have come down. And so the private sector does not want to fund a lithium production facility because lithium has very volatile pricing.

And so they're saying, not only do we not trust the technology because Thacker Pass is using next generation novel technology that is far more environmentally friendly than what they do domestically. in China, but we also don't like this volatility. So there was no place for them to go to get debt.

But when you talk to the big mining companies, they were like, well, we don't want to buy these guys. We don't want to use next generation technology. We want to use technology that's already been used for 10 years in the field.

And so the loan programs office was the only place where we could actually look at the forward price curve for lithium and look at supply and demand and figure out where is this going to go from, you know, we had third party providers that helped us with this. And how likely is this technology to work? Oh, very likely because we've actually been piloting it for over 10 years.

Okay, fantastic, right? And so the only place for them to get a fair hearing was going to be the loan programs office.

Well, look, I think that right now there are so many companies who are deserving of an LPL loan. They have done their homework. They have made sure that they're meeting our threshold, which is that reasonable prospect of repayment, that we don't have to lose money, right? That the companies that come in are just so overprepared and so amazing that we're able to make smart choices.

I think there were two big challenges with Solyndra, and both...

things we don't do anymore the first is that the loan programs office put our money in first before the private sector folks put their money in and that never happens now and so we make the private sector money put their money in first and then we match it with our debt second and so that makes sure that the project actually has enough money to be completed

The second is that Solyndra had real technology risk. And we don't take real technology risk anymore at the loan programs office. If we think there's real technology risk, we have our partners at the Department of Energy demonstration programs give them a grant to demonstrate their technology first. And so those two things we do not do anymore at the loan programs office. So we learned our lesson.

We got a bunch of unsolicited advice and we followed it, which is great. In terms of the way that LPO should work and does work today, we estimate what our chances of losing money on every loan is. We reserve that amount of money into an account, right, which is held by the U.S. Treasury. Every year, we estimate whether... That loan has gone up in risk or down in risk. The goal is to be accurate.