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Donald Trump's return to the White House has put more than $300 billion in potential federal infrastructure funding at risk, US investors said, as they grapple with the size of his move to undo Joe Biden's climate agenda.
Within hours of his inauguration on Monday, Trump signed dozens of executive orders rescinding Biden's policies, including an order halting federal payments to manufacturers and infrastructure developers.
The affected funds were made available under two of Biden's signature legislative accomplishments — the Reducing Inflation Act and the bipartisan Infrastructure Act — and include nearly $50 billion in Department of Energy loans already agreed to and another $280 billion in loan requests under review, according to a Financial Times analysis. . From the Ministry of Energy's loan portfolio.
“All agencies must immediately stop disbursing funds appropriated” through these laws, the Trump administration said in an executive order titled “Unleash America’s Power.”
Among the payments now in immediate jeopardy are a $9 billion conditional loan to Michigan-based utility DTE Energy, and another worth $3.5 billion to Oregon-based utility PacifiCorp.
DTE did not immediately respond to a request for comment. PacifiCorp said it is working with management on the terms of the loan guarantee.
“If you had grants, loan guarantees, funding that was kind of tied to an IRA and the money hadn't come up yet, it would be very difficult to see that money go out the door under a Trump administration,” Robb said. Barnett, a senior analyst at Bloomberg Intelligence.
The executive order was among dozens Trump signed in a late-night blitz after he was sworn in for a second presidential term and promised to end Biden's “Green New Deal” and boost fossil fuel production.
Trump's move to halt funding sent shockwaves through the clean energy sector and signaled his intention to undermine Biden's industrial policy, especially his programs to accelerate the energy transition.
“Executive orders indicate that federal funding for electric vehicle and battery manufacturing will be difficult to access, increasing the risk of stranded capital for manufacturing projects already underway,” said Shai Natarajan of Mobility Impact Partners, a private equity fund based in New York.
The Infrastructure Act of 2021 offered $1.2 billion to improve the nation's transportation system, while the IRA provided $370 billion in tax breaks, grants, and loans.
Both programs expanded the scope of the Energy Department's Office of Loan Programs, which was responsible for distributing $400 billion to developers and was a favorite target of Republican attacks.
Investors said they fear another $300 billion in future federal funding — mostly from the infrastructure law — could be frozen because of Trump's move.
Unlike money in a loan office, IRA tax breaks — the main form of support in the legislation — are unlikely to be affected. Credits have been the main driver of investment, with manufacturers pledging more than $130 billion since the law was passed, according to a Financial Times analysis.
Fearing that Trump would move to halt the payments, Biden officials rushed to make nearly $50 billion in loan commitments to developers in the weeks after he won reelection in November.
Trump also wants to stop the construction of wind farms on federal lands and waters, and has said he will end “unfair subsidies” for electric vehicles. Shares of Tesla, Rivian, Ørsted and other electric vehicle and wind energy companies fell on Tuesday.
Italian cable manufacturer Prysmian Group said this week it had canceled plans to build a factory in Somerset, Massachusetts, that would have made cables for the offshore wind sector.
Other investors had already scaled back their US renewable energy plans before Trump's return. German energy giant RWE announced in November that it would withdraw its plans to produce wind energy in the United States.
Nearly 25 gigawatts of offshore wind projects, 65 percent of U.S. projects in development, are unlikely to advance under the Trump administration, Rystad Energy said Tuesday.
“When you start making it look like there's a lack of stability in the investment that you thought you were making in the U.S., that's likely to have a very negative impact, in the long run, on our ability to attract capital,” Eli Hinckley said. Partner at Baker Botts.
(Additional reporting by Claire Bushey, Christian Davies, Harry Dempsey, Kana Inagaki, Laura Bittle, Rachel Millard, Atracta Mooney, Stephen Morris, Patricia Nelson)
