Axios Pro Exclusive Content

Interview: Jigar Shah, Loans Program Office director

A side-by-side screenshot of Alan Neuhauser in a button up shirt and blazer with Jigar Shah in a button-up shirt and blazer.

Photo illustration: Axios Visuals

Alan Neuhauser sat down for a one-on-one interview with Jigar Shah, director of the Loan Programs Office at the Department of Energy, to discuss capital formation in climate technology following the passage of the Inflation Reduction Act. In addition to the climate bill, the Axios Pro event discussed a variety of topics, ranging from the mechanics of Shah's department to the future of nuclear energy.

Of note: Shah manages the LPO's more than $40 billion tranche for loans to climate technology and energy companies in the U.S.

What he's saying: In the virtual interview, Shah was optimistic about capital formation and the ability of private and public funding vehicles to accelerate with the fresh injection of incentives in the IRA, but was realistic about how far some parts of climate tech still had to go.

  • On achieving "bankability": "There are other sectors where they haven't seen a deal yet, so they don't know the answer there. You know, when you ask them, 'Hey, are these five additional programs from the Inflation Reduction Act enough for you to allocate $100 billion to cross the bridge to bankability for this sector, you know, towards full market acceptance?' they might say, 'I've spent all of 10 seconds thinking about it, so I don't know.' Though that might be carbon sequestration, storage, or geothermal or low impact hydro or virtual power plants."
  • On the American approach to commercialization: "As a bank, I can't actually give somebody a loan against a contract they have not yet signed. And so we can say the technology's ready and the software is ready and the hardware is ready and it's even been deployed ... But the utility hasn't signed a contract with the homeowners. Then there is no money changing hands. And so that's a business model challenge."
  • On what venture capital gets wrong: "I think [Craft Ventures co-founder David Sacks] fundamentally misunderstands what we do ... What we're saying is, when you deploy technologies at scale, oftentimes you have equity and debt. The equity they can raise and bring to the table, whether they spark their company, whether they raise a VC round out of the ground or near ground. But then when they go to a commercial bank for debt, the commercial bank is saying, come back to me when it's project number 10. And so we're filling a gap that no commercial bank wants to fill. So I think that most people who are in the venture capital space don't actually understand how infrastructure finance works."
  • On the future of nuclear power: "There's a lot of 'we're pro-nuclear, we're anti-nuclear.' But the question becomes, where is the 47-page plan that says, here's exactly how you restart the nuclear industry? It doesn't really exist."
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