Meet the man with $400 billion to supercharge climate tech

Zero: The Climate Race

Bloomberg

Technology, Business, Science

4.7 • 219 Ratings

🗓️ 22 June 2023

⏱️ 38 minutes

🔗️ Recording | iTunes | RSS

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Summary

Tesla is a household name, but few people have heard of the Loan Programs Office (LPO), one of Tesla’s crucial early backers. Part of the US Department of Energy, the LPO is tasked with awarding government-backed loans to clean-tech. In 2010, it loaned Tesla $465 million to help it weather the fallout from the financial crisis and build out the production of the Model S. With the signing of the Inflation Reduction Act last summer, the LPO was supercharged. It now has more than $400 billion to help the US achieve its climate goals.

Jigar Shah is the director of the LPO and joins Zero to give an exclusive on the organization's biggest ever loan: $9.2 billion to BlueOval SK, a joint venture between US auto giant Ford and South Korean battery manufacturer SK On. The money will be used to build battery factories for Ford’s growing line of electric vehicles. Jigar explains why he chose to make this loan, how it fits into President Joe Biden’s electric vehicle ambitions, and how he deals with the risks of investing in pioneering technologies.

Read Bloomberg's deep dive on the Ford loan.
The Department of Energy’s liftoff reports
Article: Tesla’s shrewdest product is proving to be its charging network
Article: Ford’s electric pickup is built from metal that’s damaging the Amazon
A transcript of this episode

Zero is a production of Bloomberg Green. Our producer is Oscar Boyd and our senior producer is Christine Driscoll. Special thanks to Ari Natter, Keith Naughton, Gabriella Coppola and Kira Bindrim. Email us at [email protected]. For more coverage of climate change and solutions, visit bloomberg.com/green.

See omnystudio.com/listener for privacy information.

Transcript

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0:00.0	Welcome to Zero. I'm Akshadrati. This week, big trucks, big money, and a very big bet on batteries.
0:20.0	Out of the many, many different organizations working on climate, you probably haven't heard of the Lone Program's office.
0:26.8	But you definitely have heard of the company it helped fund, Tesla.
0:32.4	The Loan Program's office, or LPO, was set up in 2005 under the US Department of Energy.
0:39.2	In its early days, it was assigned as much as $25 billion to give as loans to help scale
0:44.9	up innovative technologies.
0:47.4	The LPO played a crucial role in helping save major US companies and even budding
0:52.2	startups from bankruptcy during the fallout of the 2008
0:56.3	financial crisis.
0:58.1	One of those loans was to a small electric car maker named Tesla, giving them $465 million
1:04.8	to help produce the Model S.
1:07.6	That was back in 2010, and since then the LPO has had some failures too. One big loan of
1:13.8	$535 million to a solar company called Cylindera could never be recovered, and the program
1:19.6	was effectively put on pause under the presidency of Donald Trump. Now it is back, and supercharged. Since the Inflation Reduction Act was signed last summer,
1:31.0	the LPO has been given the authority to issue some $400 billion in loans, all to scale up
1:38.7	climate tech. The person who heads the LPO and sits on that pile of cash is Jigur Shah and he comes
1:45.6	to zero with an exclusive.
1:47.8	The LPO is announcing a conditional commitment to loan $9.2 billion to Blue Oval S.K., a joint
1:55.1	venture between U.S. carmaker Ford Motor Company and South Korean battery giant S.K. on. Jigger is an entrepreneur and in 2003 he founded the solar company Sun Edison,
2:06.6	then sold it for $200 million in 2009.
2:10.6	Now he finds himself on the other side of the equation,
2:13.6	giving money to entrepreneurs for projects that reduce emissions.
	...

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