Transcript
Intro
Jamie Nolan: Jigar, I'm childless this week. I feel like a different woman. It's weird.
Jigar Shah: Well, I am so lucky because both my in-laws and my parents live in the area, and my son likes to sleep over at their house. This week his cousins are in town, so he slept over two nights in a row at his grandparents' house.
Jamie Nolan: Ooh, grandparent camp. That's always fun. I do not have local grandparents, but what I do have is my child at traditional American sleepaway camp for five days, and this will be the longest I've ever gone without speaking to her. What this has revealed to me so far is that if I was not a mother, I would still be a raging workaholic, because I had to tear myself away from my computer last night. And then my husband and I, completely impromptu, drove all the way downtown from the suburbs to go out to dinner like adults. It was wild.
Jigar Shah: Look at you.
Jamie Nolan: Worked a 12-hour day, then I went downtown for dinner. Who am I?
Jigar Shah: Date night. My gosh. You were a lot of fun when you were younger, Jamie.
Jamie Nolan: I was. I was. Including when I worked at DOE the first time around, during the Obama administration. We were in the before times, before I became a mother, and I pulled a lot of 7:30 p.m. departures from the Forrestal Building. And it's because I love it. I love DOE, I loved working there, and I loved working at the Loan Programs Office, which is our topic for today's episode.
Jigar Shah: It is amazing that we were able to get Chris Creed to join us. He is currently at Galvanize Climate, which is an extraordinary place, and he manages the loan fund there. So we were so lucky that he had some time. He was at Goldman Sachs Asset Management as the co-managing director for the mortgage program, and he was one of the early folks who came on to the Loan Programs Office. So it's going to be great to get his insights on those first year and a half.
Jamie Nolan: Chris is amazing. He actually ended up, I think in his final role at LPO, he did a few things, but he was our chief investment officer towards the end. So he really was one of the key members of the executive team at the Loan Programs Office, and he's a great person to come help us do our part three of Who Is Jigar Shah. So let's set the scene a little bit for our listeners, because maybe there are folks out there who aren't familiar with the Loan Programs Office. Tell us a little bit about what the office is, what its remit is, and why you were brought on.
Jigar Shah: The Loan Programs Office was envisioned in the 2005 Energy Policy Act, during the Bush administration. I think it got started because there was a recognition that we could not fund new power without having a government debt provider, because the private sector just didn't want to provide that debt. Then in the 2007 energy bill they added the fossil title and some of the other programs within the Loan Programs Office. And by the 2009 ARRA stimulus bill under Obama, they added the renewable energy title and additional money. That's when it was the most busy and did about $35 billion of loans between renewable energy projects and the Vogtle nuclear plant.
The Loan Programs Office is basically a place where you're supposed to go with first-of-a-kind projects. If you've invented some cool new way to make steel, or some cool new way to make sustainable aviation fuel, you go to a bank, and the bank says, we're not going to do that deal until there's five or ten of those things running. And for a lot of these projects, you can't get 30% returns, which is what you need to just raise private equity to do it. So having government debt is super important to getting that first project off the ground.
The other thing is, because we have 10,000 engineers and scientists on the platform at the Loan Programs Office, but also the Department of Energy writ large, we can evaluate any technology. Any technology is known to the DOE, and probably the inventor of that technology still works at DOE at one of the labs. So technologies that would scare off the private sector don't scare the Loan Programs Office. It becomes this place that gives confidence to the private sector that when their company is ready to do that first-of-a-kind project, there is a place they can go to get the debt to do it.
Jamie Nolan: Great. So here we are. We're going to get started with this point of your career. You're sitting in your seat at Generate Capital, and you have absolutely no concept or thought in your brain that you were about to join the administration, until the call comes in. So without further ado, let's bring Chris on and talk about the resurrection of the Loan Programs Office.
The Call, the Board, and the Memo
Jamie Nolan: Yay, I'm really excited about this episode. So happy to have Chris Creed here with us. So, Jigar, in part one, you told us about one of the worst calls you ever made on air as a podcaster in your entire podcasting history.
Jigar Shah: And I've made a lot of bad calls.
Jamie Nolan: It's funny when people go back and call you out on things that you've said. But this is way back in the day. Stephen Lacey asked you on the Energy Gang, right before the 2020 election, whether the DOE Loan Programs Office had a shot of success if Biden won. And you said that the office was, quote, irredeemable. That it would never get anyone to trust it again. And the universe was listening. A few weeks later, you got the phone call. Talk to us about that moment.
Jigar Shah: Yeah, I think I recorded that podcast before the election. Then the election happened, and Brandon Hurlbut came to me and said, hey, I'm going to put your name in for something. Do you want me to do it? And I was like, fine. But I don't know if you guys knew, Generate Capital was started in 2014. And as Chris Creed knows firsthand, the way that you make money in managing a fund is waiting five freaking years. It doesn't make you a lot of money on the first day. You have to make all sorts of compromises until you get a track record, and then you make money. So we were finally starting to make money. This is now 2020, and I was like, I'm finally making a salary after five or six years of doing this. So I'm not excited. And then I got a call from Christopher Davis about whether I was interested.
Jamie Nolan: And who was Christopher Davis?
Jigar Shah: Christopher Davis turned out to be the chief of staff to Secretary Granholm while we were serving. But at the time, he was on the transition team for President Biden, and he asked me if I would take the job. I of course went immediately back to Scott Jacobs and Matan Friedman, my partners, and said, hey, I got this call. And then to Richard Kauffman, who was the chair of my board, had served in the Obama DOE, and was rumored to be in the running to be the head of DOE if Hillary Clinton had won in 2016. And he was like, absolutely not. You're not allowed to take that job. DOE is a mess. No way you can take that job.
So he encouraged me to write a memo that basically said, here are the conditions I would need to take the job. And so I called Jonathan Silver, who had the job beforehand, and then Taite McDonald, who we all know is the queen of LPO consulting, and they wrote a memo with me. It was basically not that complicated. It just said, give us the right to run the LPO in the way it needed to be run so that it could be successful. And I think Richard thought that was a memo that the Secretary, and at the time Brian Deese and Ali Zaidi, who were part of the sort of triumvirate the president had chosen, would never agree to. And to everybody's surprise, they said, okay, we'll give you everything you want. And then people were like, well, damn, now that you've asked for all these things and they said yes, you kind of have to take the job. So that's sort of how it came together.
Jamie Nolan: What would you say were the top three factors that you most needed to get a yes to in order for you to take the job?
Jigar Shah: Well, I think the definition of innovation was a really important one. We needed to make sure that we weren't required to take real technology risk, because that's really what set us back on some of the failures in the program before. LPO should not be taking will-it-work, won't-it-work risk. We needed to take more mature projects that wouldn't get commercial debt. That was point number one, and that was really an Office of Management and Budget issue, because they were saying, the statute says innovation, we want to see real innovation.
The second piece is where Treasury ends up on all this, because the folks at Treasury run the Federal Financing Bank, and they have this notion that the Federal Financing Bank needs to be used in a way where we're going to get repaid. Part of the challenge we had with Treasury is they weren't paying attention to this at all. It's not that they were against the Loan Programs Office. This was not even on their radar screen. The people in charge of running this program didn't even know it was still in existence and operating. So they needed to be on board.
And the third piece for me was, when you talked to Jonathan Silver, he was dragged into the White House every single week, and they micromanaged his credit review board committee.
Jamie Nolan: What's the credit review board, though?
Jigar Shah: Every investor has a credit committee, somebody who makes a decision on the loan. That can't be the White House. LPO has to run like a bank. It can't be run like a political operation. So I said, the White House cannot be deeply involved in the process. And as you know, when we ran the Loan Programs Office, Christopher Davis even protected the Secretary from knowing who was in our pipeline. She didn't know who was in our pipeline. I think that was good, because we didn't get the level of micromanagement that Jonathan Silver got during the Obama administration.
Chris Creed: The thing that I found the most interesting, and maybe this is a longer story, but over the three and a half, four years we were there, the level of comfort, and eventually the level of respect, and, what's the word I'm looking for, permission? Permission, yes. But really, the "you guys are the subject matter expert" that we got from both OMB and Treasury at the end was remarkable. And I think we walked them there over that three-and-a-half-year period.
Jigar Shah: Yeah, and we should get into that later in the conversation, but I think you played an absolutely critical role in making that happen. Just fast-forwarding a little bit, I got a random email from somebody I knew, a headhunter, saying, I got this guy Chris Creed, you want to talk to him? And I was like, yeah, sure. And then I got Chris on the phone, and Chris was like, yeah, I got a job at Goldman Sachs, but I'm looking to get into Treasury. And I was making the hard sell, saying, well, I think this might be better. And it was funny, because the hard sell I was making was for Chris to be a contractor for the Loan Programs Office. I couldn't promise him a political position or even a job within the Loan Programs Office. So I think you joined as a contractor, didn't you?
Chris Creed: No, I joined as a federal employee. But it took, if you remember, one of the Loan Programs Office legends, Dong Kim. Dong was like, this person needs to be a federal employee. So from the time we agreed that I would join to when I actually joined was four months. And that was just the federal hiring process. So hold on, before we get to my story, how did Secretary Granholm end up convincing you to join?
Jigar Shah: Well, because there were talking points going around during the transition that the Biden administration and Secretary Granholm wanted the Loan Programs Office to be a central part of this phase of the presidency. They had publicly said there was $40 billion of loan authority sitting there that they wanted to do something with. And that was separate from me. Whether I took the job or somebody else took the job, they were saying that publicly. So my feeling was, great. I'm one of those people, I think you know by now, I do criticize lots of things, because I think things need to be fixed. But if someone calls me to task, I'm happy to roll up my sleeves and actually do the work. I'm not lazy. I'm not looking to throw pot shots from the sidelines. But you don't want to get into a situation where you're destined for failure. And I think the Secretary convinced me that she had my back. And to her credit, for the entire four years, she absolutely had to make good on that promise, because there were several times that she had to have our back.
Jamie Nolan: Absolutely. I will say, having worked with you for a long time, you criticize plenty of things, and you absolutely are willing to roll up your sleeves and do the work to improve things. You and I have collaborated on other projects like that. I do think sometimes you think it's going to be a little more straightforward or simple than it actually is. It always looks very easy to fix from the outside. Then you get there and you're like, huh, all right, it's not what I expected. So what did the first months look like? What was your biggest surprise when you got in there? Where were you completely wrong?
First Day at a Dormant Office
Jigar Shah: So, just to go right before that moment. My financial disclosure took longer to get through. That's why I didn't start until March 3rd instead of January 20th. And the reason is I owned a bunch of solar projects, and I went to war with the ethics people. I was like, so I could be a slumlord and come into office and own a bunch of real estate, but you won't let me own solar projects, where no amount of policy would have improved the value of solar projects I already owned.
Jamie Nolan: It's so funny now, with what we're seeing in this administration, and the president has profited by $2.3 billion, last time I checked the numbers, from his office. And here you are with your little old solar projects.
Jigar Shah: So I definitely got delayed by that. The other thing I did, though: my wife retired from the State Department and had Senior Executive Service, so I knew people that worked in the government, and it was very clear that you needed a chief of staff to help manage your role within the DOE. Everyone pointed to Sydney Bopp, our first chief of staff, who was extraordinary. Winning her over, because she had just had a baby, she had just had Daisy. Getting her on board was my best decision.
The funny thing is, on my first day, no one knew I was starting. I happened to be friends with Andrew McCabe, and Andrew was our head of risk. I called up Andrew and said, hey, Andrew, this is my first day. What should I do? Because I'm sitting in my office in Bethesda.
Jamie Nolan: You went to Forrestal on your first day?
Jigar Shah: No, because it was closed. It was Covid. Only the White House was open, and those people had to get tested, I think every day, to go to the White House.
Jamie Nolan: Did you have a laptop?
Jigar Shah: They mailed me a laptop. I went to, not Gaithersburg, the Germantown office, and got my badge and all that stuff. And Andrew quickly assembled everybody online and said, hey, let's do a managers meeting. And Dong Kim and all these other folks showed up. That was my first day. And it was very clear to me that Dong had done an extraordinary job while the office had basically been dormant, according to the Secretary. That's what she called it when she was getting confirmed. But the quality of the people was just so high for a dormant office. You would have imagined that most of the people would have left, but he kept a solid group of about 80 people together.
Chris Creed: The dormancy was on new loans. They were obviously managing the loans they had originated during the first term of the Obama administration. There was, what, over $35 billion of active loans that the team was managing.
Jigar Shah: Yeah, that was absolutely the case. And when I came in, I remember Dong Kim sat me down and said, Jigar, I just want you to know that this office is for nuclear power. And so then we had a good conversation about how we started nuclear. And true to my word, we worked on nuclear power for the entire four years to try to figure out how to help them. But getting a lay of the land was great. We weren't allowed to go into the office regularly for the entirety of 2021.
Jamie Nolan: Okay, but Jigar, you didn't answer my question. What was the biggest surprise? What did you think would be true about LPO when you got there, and you were mistaken?
Jigar Shah: Part of my answer is that the quality of the team that was there was extraordinary. I wasn't starting with a blank canvas. The other thing I realized on day two or something, which was fascinating: the way they were dealing with the budget surpluses they had, because they had a certain allocation of money from Congress and didn't have enough employees to spend that money, was they were prepaying their employment contractor. They had, I think, about $20 million of carryover funds sitting at JLL with the contractor vehicle. That's when I knew, on day one, oh, I can bring in a lot of contractors, because we already have a pre-funded budget here.
And so then I went to work convincing all of the smartest people I knew who would be open to joining the U.S. government. The first person I called, and the first person who said yes, was Chelsea Sexton, who ran the ATVM program, and then others. I think by the middle of the summer we had gotten 30 or 40 people on board. But I remember Dong Kim was very particular. He was like, Jigar, this is how political appointees get in trouble. So we have to do this the right way. We have to do the paperwork properly. We have to post the job. We have to get them to interview people. You can't just tell them who to hire. You can submit names into their queue, and then they have to hire them, because they work for JLL. And so we did everything by the book. But we brought a lot of people on board by the summer of 2021.
How Chris Creed Joined
Jamie Nolan: Great. Now, Chris, I want to talk about you. Let's talk about your side, because I would love to hear this story from your perspective rather than Jigar's. It's summer of 2021. At the time, you're a managing director at Goldman Sachs Asset Management, co-running the mortgage-backed and securitized team with more than $75 billion under management. At this point, the Inflation Reduction Act is over a year away. The money isn't there. There's very little funding, less than you were managing alone, inside of LPO. There's no guarantee that more funding is coming. So what did Jigar say that actually got you to say yes and join the team?
Chris Creed: It's one of my favorite stories, and I love telling it. I was at an inflection point in my career at Goldman. I had a few options. I could stay at Goldman, I could go to another Wall Street bank, I could go to another asset manager, and all those things I was pursuing. But I was also looking at jobs in the administration. And so I actually did this, and I don't think I saved the piece of paper, although I probably should look through some more boxes: I did one of these Venn diagrams. What am I good at? And since I only know how to do one thing, I wrote "debt." What do I think is going to have a lot of outsized growth and contribution to GDP over the next couple of decades? We didn't have the term AI back then, but I wrote down tech, pharma, energy, question mark. And in the bottom of the Venn diagram I wrote, what will I be proud to have done at the end of my career? And in that I wrote working for the people, working in public service. I should note that I always was proud of what we did in the mortgage world. And then finally, is there something to be done for the energy transition or climate change?
I was staring at this for a while, and I'm going to give a shout-out to an old boss, now a friend of mine, Tom Teles. I'm going to say we were out for coffee or a drink, but this might have been a phone call. I was showing him this piece of paper, and he somewhat tongue-in-cheekly pointed at the middle and said, you should find out if the Biden administration has, in the Energy Department, a loan office that'll help combat climate change. And we kind of laughed, and we looked at each other, and I said, I should make sure that doesn't exist before I dismiss it. And it turns out that they did.
I ended up talking to my headhunter, a guy by the name of Justin Wilkins, and I told this story to him. And he said, well, you need to talk to Jigar Shah. To which I said to him, and he will back me, this is a true statement, I said, what is a Jigar Shah?
Jamie Nolan: What is a Jigar Shah!
Chris Creed: And he was like, I'll make the introduction, you will like him. So we set up a call, which was the day I got my Covid booster shot, or my first shot. I remember it was one of the days I got a Covid shot, so I was feeling not great. And I got a phone call. You called me, and I was out walking around the Upper West Side, and we had a really good conversation. But the thing that really stuck with me was, I asked you the very question that Jamie asked, which is, why do you want a mortgage idiot to help you with the Loan Programs Office? And your answer was, well, Chris, 40% of emissions come from buildings, and if we don't understand how buildings are financed, we're not going to be able to solve a major component of this problem. And that was what got me. I think I said yes about four seconds after that. And the rest, as they say, is history, because it was a great three and a half years working together, and it's one of the things I'm really proud of in my career.
Jigar Shah: It really was. I knew Chris was special when I first talked to him. It's one of those things where you can never restart a dormant office, or accomplish an entrepreneurial goal, without an extraordinary set of co-founders. And Chris was clearly a co-founder early on. I just didn't know how to give him the title. So I'm like, can you work for Andrew McCabe in the risk group? Can you work for this person? And Chris is like, I left a big job at Goldman to mop your floors? And I was like, wax on, wax off, Chris.
Jamie Nolan: He trusted the process. You really trusted the process, and he found the spot for you eventually.
Chris Creed: I did, exactly. And that's the thing that was the best part. You're right, it was a little bit of a startup feel. I think you're going to have the numbers better than I will, but I think I was the 90th person to join the office, and I think you had 50 or 60 when you joined. And of course I joined three or four months later than I wanted to because of the time it took to onboard. But by the time we were done, how many people worked for us? 450, plus or minus?
Jigar Shah: We were up to 450 or so. But even before the IRA passed, I think we were knocking on 200.
The Early Days: 300 Phone Calls
Jamie Nolan: Jigar, I know recruiting was a huge part of your job, but give us some insight into your day-to-day in the early days. What did you spend your day doing? I know you spent a lot of time on the phone. What were your top three priorities, and who was the hardest to get on the phone?
Jigar Shah: Well, the first priority was to bring on Hayley. No shade on the support staff in the front office when I got there, but they were not our good friend Hayley Emerson. So I went out and got her, and that made my life ten times better.
Jamie Nolan: And what did she do for you?
Jigar Shah: She was nominally my assistant. I think she had just graduated from Washington University, so she was all of 22 or something. She knew DC. Her dad was an ambassador. She is one of those extraordinary people who networked with all the rest of the 25-year-old political appointees. And so suddenly we had connections within the rest of the building. They did social engagements together, they went out for drinks together, or whatever it is 22-year-olds do. I don't think they drink alcohol anymore. But whatever they did, that was hugely important, because I was running my job. I didn't know what the rest of DOE was doing, or the rest of government.
The other thing I did was I just sat down and called everybody she put on my calendar. I think I probably called 300 companies over the first six months and just said, I need you to apply to the Loan Programs Office. I know that you could use this money. I need to get a win. And they were like, hell no. I don't trust this process, and I'm not going to be a part of this thing. And so I just kept working it, kept calling people, and I got, I don't know, seven or eight people to say yes. And they started applying to the Loan Programs Office.
And remember, the way the government works is you can't get anything done on a hypothetical. The only way to get things done is to have a real loan application in the Loan Programs Office, and then go to your general counsel and say, here's a real loan application. What are the four reasons I can't do this loan, and how do I go fix those four things? Getting those first seven people in was critical, because otherwise you couldn't start the domino effect of fixing the rest of the office.
I'll give you some examples. When we first brought loan applications in, we were still running under an RFP. People were like, oh, you have to do an RFP and see who applies, and then you have to evaluate all 20 applicants and figure out who has the most points. And I was like, are you kidding me? This has got to be a rolling process. Turns out somebody in the Obama administration in 2009 thought that having a solicitation was a good idea. Just figuring out how to allow people to simply apply for a loan wasn't straightforward.
And then the third thing I did was assess my senior team. The senior team we had was a group of amazing people with amazing careers, but some of them were not perfect for the role we needed them to do. For instance, our general counsel at the time could not stop with sexist remarks in every single conversation we had. And I was like, what are we doing here?
Jamie Nolan: Honestly, I don't even remember who that was.
Jigar Shah: I'm not going to name him, but I'm just telling you that our general counsel was not great. He left, and then we got Becky Limmer. Lord almighty, where would we be without that superwoman? So those were the big things: find an extraordinary assistant, who I can now say was extraordinary because the Secretary, as soon as she realized she was there, stole her from us.
Chris Creed: She did that twice. She stole my admin a year and a half in as well. She was very good at taking the right talent out of our office.
Jigar Shah: She did. And then I guess the fourth thing was, as you suggested, recruiting. I had to get people who had subject matter expertise to join our office. One of the people I got on board early was Peter Coleman. He was not a likely choice for the Loan Programs Office. He hadn't worked on Wall Street. He was more of a solar developer slash project finance guy. I think he probably was involved in closing 25% of our final loan count.
Chris Creed: Peter was not only an amazing banker but also had great organizational skill. And we ended up, we're skipping way ahead, but we ended up modeling our senior team off of Peter, and we hired three or four people that basically mimicked what he was doing across all of the businesses. The other thing that we did in those early years was we needed to educate not only the borrowers but the ecosystem, in particular the banks, on what we were and how we were doing things. Because outside of a handful of people, I don't think the advisors really understood what we were there for and how we were going to work.
Jigar Shah: Oh, for sure. We set up an outreach and business development team. Rob Edwards had come in to lead that initially, and we had maybe ten people working for him, and one of them was our good friend Chelsea Sexton. They had to guide all the applicants through the process. We couldn't write their applications for them, but we could sit there and hold their hand and answer questions. And then the other point was the ecosystem. You had Taite McDonald at H&K, and that was about it, in terms of people you could hire on the outside to help you through the process. Building that ecosystem, getting four or five or six law firms or lobbying firms to even add this as one of their products, was a Herculean task.
How Jamie Joined
Chris Creed: Which of course begs the question, Jamie, and I actually don't know the answer to this. How did we get you?
Jamie Nolan: I remember exactly where I was when I got this phone call. I was working out of a co-working space in Old Town Alexandria when Sydney Bopp called me, and I was shocked to hear from her. We were acquaintances. We overlapped during the Obama administration at DOE, when I was the communications lead for the Solar Energy Technologies Office and she worked at LPO, so we occasionally interacted. I think we collaborated on a couple of CSP, concentrating solar power, projects. I had a very good view of her and respected her a lot, so I was excited to hear from her.
We got on the phone, and she cut right to the chase, because I'm sure there was so much to do in so little time. She was like, hi, I would love for you to come join us at LPO. We just got here, and basically there's no communications function. There's just nothing here. I really need you to come in and help me rebuild it. At that point I was already very committed to being an independent consultant, and my daughter was very young, and I was not interested in a full-time job. So I said I could come in as a part-time contractor. And so I had to create space in the lineup.
I remember I was working for this campaign, Local Solar for All, that actually ended up becoming the organization that is Common Charge now, which is a group working on distributed energy resources. I called up my client contact and said, they want me at LPO. And he was like, go with God. He was like, we really need LPO to succeed. We need a functioning Loan Programs Office, and the best thing you can do for all of us is go over there and help them fix it. They were incredibly supportive of me giving very limited notice. I was able to hang on to a couple of projects, but by the end of these first two years, I loved the LPO work so much, I woke up in the morning and it was all I wanted to work on. I ended up letting my other clients go so I could devote all of my time to LPO, because I was just so pumped up about what we were doing. We were making such an impact. I was so empowered by the work. It was a great decision and an incredible career experience, my favorite experience I've ever had in my career. But yes, whenever Sydney Bopp calls or texts me, I'm like, yes, what do you need, forever and ever. I'm so grateful to her for bringing me in.
Chris Creed: Yeah, 100%.
Almost Running Out Of Money
Jamie Nolan: Okay. So people hear $400 billion of loan authority and assume that we were just flush with cash from the jump. But the administrative budget is a separate appropriation. And at the beginning, from September 2021 to September 2022, you only had $32 million in the administrative budget. We were carrying forward some money in prior-year balances just to make the next year work. Did you feel like, here you were sitting on the largest energy lending authority in the world, at least that we knew of, yet you were over there doing the math on the payroll?
Jigar Shah: Yeah. So when we first came into office in March of 2021, we had roughly $40 billion of loan authority, depending on how you did the math across the automotive program, the innovative program, and the tribal program. And then we had the carryover funds we talked about. In September of 2021, we still only had the $40 billion worth of loan authority. And if you remember, there was Build Back Better, and there was this fight between the House and the Senate where they were trying to get the bill passed. The Bipartisan Infrastructure Law was passed in the Senate, and the House was saying, we're not going to vote on it until you vote on our thing. And then there was a compromise that came together at Thanksgiving, basically, where the Bipartisan Infrastructure Law was signed, and then the Senate was supposed to pass Build Back Better.
So going into Thanksgiving, we were like, oh, we're going to get all this new loan authority within the Build Back Better law and we're going to get bigger. And I remember not caring at all about this stuff. At all. I was just focused on the $40 billion that we had, getting loans in, and getting our first loan processed. What's the point of having money if you can't get any loans done? And I remember Sydney coming to me and going, Jigar, you're the one who's supposed to be advocating for more money out of Congress. There isn't someone else in the office that's supposed to do that. And if you miss your chance, it's going to be another ten years before there's another chance to get loan authority into this office. And I was like, okay, I guess I've got to start working on this stuff.
It was right around this time, remember, we're still during Covid, and nobody had met each other in person, really. So I decided to start having all the political appointees in my backyard in Bethesda. And they started coming to the backyard, and I'd invite 20 people and 42 people would show up, because everyone was so desperate to meet somebody else that was serving the administration. And so then I started networking with people who were part of the Inflation Reduction Act work.
All the while, we're hiring people, because we needed to fill positions. I think we had authority to fill 140 positions in the federal category, and we had some authority to do contractors. So we're hiring people, we're hiring people, we're hiring people. And then the head of the budget for the Loan Programs Office comes into my office right around Thanksgiving, when the Bipartisan Infrastructure Law passes but Build Back Better doesn't, and says, at the rate at which you're spending money, we're going to run out of cash. And so we're going to have to lay some people off out of the contractor vehicle. And I was like, oh, okay, let's figure this out. Because we were going to get more authority from Congress, and that would come with more administrative budget.
The Bipartisan Infrastructure Law had passed, and that created the Office of Clean Energy Demonstrations, it created the Grid Deployment Office, some of those other offices. And it was very clear that we had not yet filled those roles at DOE, because of Covid and because of other things. And we had all these extraordinary people who had joined us. Bill Magness had joined us, who was running ERCOT, the independent system operator of Texas, right before he came to join us. We had Jonathan Abibi come on board, formerly of Grid United, who had worked with Michael Skelly on transmission. So the two of them went over and set up the Grid Deployment Office. And then we had a bunch of awesome people working for us who said, we would love to go stand up the Office of Clean Energy Demonstrations. So we did that. I think even you, Chris, were probably seconded over there for a week or two.
Chris Creed: We were talking with them when they were putting up their risk framework. We gave them a little bit of help thinking about how to set it up. And it was great. It resulted in a couple of things. One is, I'd like to think that we helped, and obviously gave them people. But it created a wonderful synergy between especially those three offices, the grid office, OCED, and us. And that allowed us more network and support within the building, which ended up being very necessary over the course of the next three years.
Jigar Shah: For sure. But it also had a bunch of our people charging charge codes in those places, so that we didn't have a budget problem. We got saved on the budget side. We didn't run out of cash.
And then, if you remember, there was this thought that we were going to pass the Inflation Reduction Act at Christmas. That didn't happen. Then it was January, and that didn't happen. And it kept going. And I kept having these people come to the backyard for these Covid get-togethers. And what happened in the end was that Joe Manchin did not want the Inflation Reduction Act to cost that much. So people started to realize that giving us more loan authority cost the U.S. Treasury almost nothing. And that came out of a lot of the backyard conversations, because giving us a billion dollars of loan authority was only charged as about $10 million of cost to the U.S. Treasury.
Chris Creed: I think it's one of the most misunderstood things about our office. Even earlier in this podcast, we said we had about $40 billion of loan authority, or with the IRA, about $400 billion. It's not because you and I and our teams couldn't do math. It's because the actual government accounting of adding together the different ways Congress could appropriate loan authority to us isn't simple. Congress needed to give us both loan authority as well as, and I'll use a private sector term for our audience here, a loss reserve. In government speak, that's a credit subsidy, but it's effectively a loss reserve. They need to give us both of those things for us to operate our lending, in addition to the administrative budget you talked about earlier. And a lot of people miss that the interplay between the loss reserve and the loan authority is not always one for one.
Winning Over OMB and Treasury
Jigar Shah: I think that's exactly right, Chris. And the thing that I remember was, when you first came into office, I made you learn all of that with Andrew.
Chris Creed: You owe me for that, by the way.
Jigar Shah: And if you remember correctly, our OMB examiner is a guy by the name of John Dick. My wife worked at OMB, so I had a lot of friends over at OMB, and everybody at LPO hated John Dick. And it's not because John was a bad person.
Chris Creed: Just to be clear, that was the older crew.
Jigar Shah: Yeah. Not because he was a bad person, but because under the Trump administration, his job was to tell LPO every day that we're going to try to shut you down. Because OMB is part of the White House complex, whether you're a federal employee or a political appointee. And my instructions to Chris and to Andrew McCabe and everybody else were: guys, these people are not bad people. They're speaking on behalf of the White House they serve. So figure out how to educate him about what we're doing, how we're managing risk, all the things that we've done, all of our data, and win him over. And they did that. I would say that by 2022, John was saying that we were the best-run loan program in all of the U.S. government.
Part of what got us to where we could have the $400 billion that people were talking about putting out the door was that we took no opportunity for granted. We were educating folks at the National Economic Council. We were educating folks at Treasury. We were educating folks at OMB. We never took for granted that people needed to give us their respect. We always went in and tried to earn it.
Chris Creed: I couldn't agree with you more. I also think the hard reset where we worked with John, who I still think is one of the great American public servants in government, paid dividends. Same, I'd argue, with Treasury. I think there was still some hangover from loans that didn't work out so well and got people in front of Congress, mostly Solyndra. There were senior people at Treasury who still had some hangover from that. So when they saw that we came in with really thoughtful risk assessment, strong underwriting, and a process we could replicate on a deal-by-deal basis, that helped a lot.
Rebuilding The Reputation
Jamie Nolan: Chris, you said the solar company name that shall not be named. So that is a perfect segue into our next segment, about the office's reputation. Let's get into it, boys.
I came in, of course, to a non-existent communications function. Did not exist. There was one person who had five jobs, and one of those jobs was communications, so it just wasn't happening. I think people need to fully understand what this brand actually looked like when we got there. It was not a neutral government office. It was an office whose last generation of borrowers had been hauled in front of Congress and made an example of. The name itself had become a punchline in D.C., a frequent flyer at Fox News and the other right-wing media outlets. It became a political football in election cycles, as an example of gross negligence or misuse of government funds, which was completely unfair. Before we get to what we did to rehabilitate that reputation, Jigar, describe your perception of what you inherited, and maybe what was the toughest part of it.
Jigar Shah: Well, the first thing for me when I came into the office was just to understand the truth. Jonathan Silver is a good friend, so I knew that there was no malfeasance that went on. But I think it was important to understand what we did wrong on that deal, and whether things had gotten fixed. On that deal, we took real technology risk. In the end, the technology didn't work. And the U.S. government put its money in first, before the equity was fully raised and put into the deal. So on the first day that Chris came in, I said, we're never taking technology risk. Not real technology risk. We'll take perceived technology risk, but not real technology risk. We don't take will-it-work, won't-it-work risk. And we never put our money in first. We always put our money in after the equity puts their money in.
And then, we got a lot of unsolicited feedback from 2012, and there was a commission report in 2015. And I went to Chris and Andrew and said, did we do all this stuff? Did we actually do all the things we were told to do? And it turns out we did.
Chris Creed: Yeah, we did. Except for one, which was fully fund the office. We had that sheet, which was the 13 recommendations, I don't have the exact number off the top of my head, from the Herb Allison report, which is the report Jigar's talking about. Set up an independent risk team, and so on. Thirteen very thoughtful recommendations from the Herb Allison committee. And the only one that we did not do was fully fund the Loan Programs Office so it could actually do this.
Jigar Shah: Totally. So then, once I realized we had done it all, I wanted confirmation. We went to the Congressional Budget Office, which had been one of the most active folks writing unsolicited suggestions to us, and said, hey, we've done all of these upgrades. Do you agree that we've done these upgrades? And we asked OMB, et cetera. And everyone did. Because I didn't want to do a communications strategy where we tell the world that we fixed everything and we hadn't fixed everything. I wanted to make sure it actually had been fixed, or we had a plan in place to fix it, so that when people asked tough follow-up questions, we had good answers. And I think we did the homework.
So when I was talking to all the 300 CEOs to get them to apply to the loan office, I was confident we had made all those corrections. I was confident, when I was telling you that we could go out and start heralding that the office was open for business, that we really were open for business. And then we had a credit review board, which was mostly political appointees within the Department of Energy, and I had to tell them that we had actually fixed all the things in the office. I just think in general people didn't realize how much trust building had to be done, not just externally, with the press and reporters, but also internally, as Chris was saying, with Treasury, but also with the White House and others. And so I think we did the work before we did the comms.
Chris Creed: So, Jamie, from your perspective, did we do that right? Was the credibility restored in the market writ large?
Jamie Nolan: I think some of the early signs for me that we were having success were, one, we started to get incoming media inquiries. Instead of having to pitch Jigar and put him out there, we actually started to get a lot of requests for him. And we started to get media coverage that didn't mention the solar company that shall not be named. When I started, there was no story ever written by a journalist that didn't frame us in those terms. We were defined by the scandal. When we stopped being defined by the scandal, we started putting breadcrumbs into these stories about the tremendous record of success for the office.
What that looked like was a two to three page highlights messaging document, one of the first things I made for the office. We had incredible stats. We had anecdotal successes, and we had numbers to back it up. We had a very, very strong record on the office's losses, which never rose above 3% of taxpayer dollars lost. We had incredible stats to point to. And so I had Jigar just repeat, repeat, repeat, everywhere, every room we could get him into. And slowly, as we seeded that into the narrative, and as the staff grew, because it definitely was the Jigar Show. He was out there. He was the most important spokesperson for the office, and that was very public facing.
But there were a lot of rooms where that huge outreach and business development team we built was out there meeting with everyone. They had sector assignments, and they were taking private meetings. They were going to every single relevant conference for their sector, talking to everyone who would meet with them. Little by little, people start to trust you again when they see the quality of the folks who have come onto the team. We were able to put together great messaging on the reforms that had been made to the office, and why what happened before wouldn't happen again. We had a great success story that just hadn't been effectively told, frankly, because the office hadn't been properly resourced in a really long time. And little by little, people started to tell me, I can't turn around without seeing Jigar. And I'm like, great, that's what we're going for. It is the Jigar Show. We are doing a world tour to restore the credibility of this office. Jigar is a powerful communicator, and he's very persuasive. It certainly took the first two years, but it worked.
The MAAR and the IRA Math
Chris Creed: The other thing that I think we did really well in the first two years, and it set the stage for the success we had in the last two years, was we built a really good pipeline. And I don't want to undersell it. That must have been hard, Jigar, because getting real companies to apply to a, quote, dormant office when they need the money, when they're going to build their widget factory, they needed certainty that if they were going to spend the time and effort, the government would be there. That took a leap of faith for at least our first year or so's worth of applicants.
Jigar Shah: Oh, for sure.
Jamie Nolan: And also, for our listeners who don't understand, it probably costs, what do you think, a million dollars to apply for a loan from the office?
Jigar Shah: More. It was at least 1,000 hours of staff time, if not 4,000 hours, to put a part two full application in.
Jamie Nolan: So it's a heavy lift. It's a big ask for these entrepreneurs. They had to trust that we were going to be a trustworthy partner, that this money was real, that it was going to be accessible to them, and that we were going to add value to what they were doing.
Chris Creed: And Jamie, for your listeners who may not realize it, and this is actually relatively common in the debt market, the borrower will pay the expenses not only of their costs to get debt, but the lender's costs. So the legal and engineering and non-staff-time costs that the LPO bore were actually expenses the borrower had to pay.
Jigar Shah: Yeah, millions of dollars. The cheapest deal for us to process was probably about $2 million. Some of those bills came in at $9 million for the borrower. These were expensive loans.
But to your point, Chris, I'm pretty good at creating a jealousy loop. Part of what we did was we created the MAAR, the Monthly Application Activity Report. You and I both know that the applications that came in in 2021 were largely garbage. And I told people, I said, we need to lower our bar to bring in applications. Part one applications. It was like you could fill it out on a napkin and send it in. That's not the part two applications, just part one. All we did in part one was say, we believe you are eligible for the office, please feel free to fill out a part two. The goal was just to get people to come in. The goal was not to set a high bar. And then every six months we kept tightening the requirements, to the point where in 2024 it was almost impossible to apply to the Loan Programs Office. We were making sure you were perfect in part one before you could apply to part two.
But at the end of 2021, we had 77 loan applications or something like that, equaling roughly $77 billion of requests, something like that. It needed to be that people didn't feel like they were the first one applying. They had to feel like they were the 78th one applying. And that worked to our advantage, because when we passed the IRA in August of 2022, I don't remember what the MAAR was that month, but it was probably 125 applications seeking $125 billion. We only had $40 billion worth of capital in the account. But in the U.S. Congress, when Chuck Schumer was doing all of his math, the way this worked, just to be crystal clear, was there was a hole in the math, because a bunch of money had to be zeroed out to meet Senator Manchin's requirements, and then they needed to put emissions reductions back into that spreadsheet to make the numbers work. And they couldn't just put $400 billion into that hole if we had $12 billion worth of loan applications. The fact that we had $125 billion of loan applications, or whatever that number was, is why they were able to do it. So weirdly, had Build Back Better passed at Thanksgiving of 2021, we would not have gotten $400 billion worth of loan authority. Had it passed December 31st of 2021, we would not have gotten $400 billion in loan authority. We got it because it passed in August of 2022.
Monolith: The First Deal
Jamie Nolan: Jigar, as we started to fix this major reputational issue with the office and restore the credibility, what was your indication that the tide was finally turning? When were you like, all right, we really have a handle on this, we're ready to shift into the next gear?
Jigar Shah: Well, I had a false impression that we had a handle on it when we got the Monolith Materials deal done. When we first were processing the Monolith Materials conditional commitment, the loan office basically said, we don't want to give this conditional commitment. And I was saying, why? And they were like, well, because we don't think they're fully ready. Lowest possible risk deal. And I was like, this is a conditional commitment. We're not even wiring any money to anybody. All we're doing is giving them a glorified term sheet. How is this the highest bar possible?
In doing that project, I was able to get them to agree to use a concept we called CPs, conditions precedent, where we said: if this turns out to be true, which our independent engineers thought it could be, and this turns out to be true, and this turns out to be true, then we will close the loan with you. So now go out and prove to us that those three things are true. I was able to get the credit review board to agree to that structure. I was able to get our staff to agree to it. Chris and Andrew were able to get OMB and Treasury to agree to it. And that was not an easy feat, because they were also asking, why is this not a closed deal in the rearview mirror? And my point to people was, the whole point of the Loan Programs Office is to do deals that nobody else would do, and to be additional. If we gave them a conditional commitment and they ended up not meeting the conditions and never closing the loan, we haven't put any money out the door, but we helped them get over that next milestone, that valley of death. I think that's hugely important.
Jamie Nolan: And it showed momentum. I remember you really wanted to get that deal done. You were highly, highly motivated to put one tally on the board.
Jigar Shah: I was not leaving 2021 without a deal.
Jamie Nolan: Yes. And I think we ended up putting out the press release two days before Christmas. I was already off work at that point, and I was like, oh, this isn't optimal. This isn't how you do it. And you were just like, no, we need to put points on the board. And I'm like, okay, well, I'll optimize it next time. But there are points on the board. That project ended up not going forward, but it was really important in showing that the office was open for business and that we were actively completing deals.
Jigar Shah: Oh, it was critical. You tell me, Chris, but I think it changed the entire mood in the office. And as a result, we got ACES Delta done, committed in April and then closed in June. And we got the General Motors deal done. Our friend Monique carried those deals on her back to get them to the finish line.
Chris Creed: The thing I remember about the change in the office after Monolith was, there were suddenly people in the office who had done a deal. And it's hard to think about that, given the following three years were very busy, but it had been a long time. There was the Vogtle upsize, but that wasn't a new deal. It had been a long time since a new deal had been done. There were a handful of veterans from the office who had been around when we had done a deal, but most of the people there had not done one. So it was also this proof point to the office that, oh, this flywheel can start. We can do this.
ACES Delta: The First Close
Jamie Nolan: I would love to give an example of one of these deals. You just mentioned ACES Delta, one of my favorite projects. That loan closed. That project is operational. Really proud of that project. Jigar, can you tell us a little bit about what that project was, what it was trying to achieve, and why it was one of our early wins?
Jigar Shah: Yeah. There was a company called Haddington Ventures who had identified that there was a coal plant in Delta, Utah, that had these salt domes under it. It just happened that the geology was perfect there, and they had selected a few that would be perfect to put hydrogen in. And LADWP, the utility that serves Los Angeles, wanted to do a hydrogen deal, and they own the transmission line from Delta, Utah, to Los Angeles. So they, through their affiliate IPA, were guaranteeing the loan, basically, through a series of approvals. So it was a pretty low-risk deal. Haddington was doing that deal, then they got Mitsubishi interested.
And I don't know that I was overly impressed by burning hydrogen in a Mitsubishi gas turbine. For me, it was about making a crapload of hydrogen, because they were using electrolyzers running on excess wind and solar on the grid, whenever grid prices were cheap, which happened to be when solar and wind were running, and storing that hydrogen in these salt domes. My sense is that there will be fertilizer companies and others who co-locate there and actually use that green hydrogen to do stuff. But they were doing it because every once in a while Los Angeles is short on power, and when they need that power, they're willing to pay whatever it takes. Burning hydrogen in a gas turbine met the climate goals Los Angeles had.
I think we announced a conditional commitment in April of 2022, and everybody was surprised, except for Monique, our loan officer who ran that one, that it was ready to close in June. It closed so fast after the conditional commitment that pretty much everybody was caught flat-footed. I remember someone coming to my office going, Treasury is not sure whether they will accept a digital signature. So the only way to get this loan closed is we have to sign it in ink, and then we have to transport it across town to Treasury and hand-deliver it to them. Because we weren't sure whether electronic signatures were okay, because this was our first closed loan. We weren't sure what all the rules were from Treasury, and some of them were written in 2008 or 2009.
Jamie Nolan: So did someone physically carry the deal? I think we did. Do you remember?
Chris Creed: Not me, because I was still mostly in New York back then.
Asking Dumb Questions
Jigar Shah: The one thing I would say throughout all of this is that we were very good about asking dumb questions. Every time we turned around and someone put a regulation on us, we asked: is this in statute, meaning the U.S. Congress put it into a law and told us this? Or was this an own goal, set by some regulation written by somebody in 2010 that no longer applies?
Jamie Nolan: And there's also that thing in government where it's "the way we've always done things." There's a lot of that.
Jigar Shah: I was so hated by the general counsel of the Department of Energy, because I just kept asking. They were like, why would you ask? And I was like, because I don't believe you. And they're like, what do you mean? And I said, I think you're largely managing what they call Washington Post risk. I don't care what Washington Post risk is. That's for the Secretary to manage. You, as the general counsel, need to tell me if this is statutory and I need an act of Congress to fix it, or whether this is something you could fix by reclassifying it out of the general counsel's office. And it was very painful, but I'll give you one example.
One of the most hated parts of the Loan Programs Office is this concept called credit subsidy. If you don't have this loan loss reserve money that Chris was talking about dedicated to you from the U.S. Congress, which we did not for the innovation title when we first came into office, I think we had $200 million of credit subsidy left, then the borrower has to pay it. So if we determined that the borrower on a billion-dollar loan was a 15% risk, they had to pay $150 million upfront in cash, which obviously none of them had, to close our loan. Turns out that the Export-Import Bank, what they do is translate that $150 million into a premium that you charge as a higher interest rate, and then calculate: would you have made an extra $150 million over the life of the loan? Turns out we could do that. But we were told that we couldn't.
So I remember Chris had to write a paper, and that paper had to go to John Dick, and John Dick read it and was like, oh, this looks like a sensible paper. And then it got approved. For years, people were saying it's not cost-effective to use the Loan Programs Office, because unless they have appropriated dollars to pay the credit subsidy for you, you have to come up with $150 million in cash upfront. And that was never the case. You could always just charge a higher interest rate, which is what Ex-Im Bank did, and what we ended up doing for the other four years.
Lessons Learned
Jamie Nolan: So, Jigar, we've just run through what maybe a lot of us government or former-government nerds enjoy, a lot of the bureaucratic wrangling we had to do in the first two years to take the office from dormant to thriving. And it most certainly was. What do you think are your biggest lessons learned from this process of rehabilitating the office, its reputation, its staff, its processes? What will you carry forward for the rest of your career?
Jigar Shah: Well, the first thing is that you have to have a boss that's not only supportive but actually has your back. And I would say Secretary Granholm and Christopher Davis had our back at every turn. Sometimes I felt it and I knew it, and sometimes I didn't feel it and didn't know it, because they were doing it quietly somewhere else. Unless they are giving you air cover on a regular basis, you can't do all the things that we did.
The second thing is that you have to have not just good people, but the best people. I can't tell you how many weird chief-of-staff-only calls Sydney Bopp had to be on, to coordinate all of this stuff with the budget office and this office and the general counsel's office and that office. And then when our GC left, to make sure that Sam gave us the best of the best as the replacement GC, and that was Becky Limmer. I don't know what favors got traded, but we got the best of the best.
And I don't think people really understand the impossible nature of the task that Chris Creed was given. People think, oh, he just put the right words on the page and this happened. It was a Herculean task. It was literally almost impossible to earn that much respect from OMB and Treasury and everybody else. It only comes from hard work and the reputation they brought to the job. Same with you, Jamie. I don't think that just doing the things the right way that you got taught in school was going to work. You had to work your contacts. You had to work relationships and favors. You had to make sure that folks still in the building, who you worked with when you were at the Solar Energy Technologies Office, did favors for you. You had conflicts sometimes with the Secretary's communications people. And all of that was navigated so supremely well that it actually resulted in a good outcome.
I just think everybody takes that for granted. They're like, oh, we had good people. I'm like, no. We had the only people that could have possibly pulled this off. It really was an irredeemable situation. And it was only the fact that we had the best of the best people that we pulled it out. People sometimes take for granted how good they are. We had extraordinary people.
The last thing, though, is on my side. I was cashing in 25 years of favors. Those companies, I knew them for a long time. And I got accused of that later in the story. But whether it was Plug Power or Monolith Materials or some of the other folks, you remember, Chris, the Sunnova folks, the amount of cajoling to get them to apply to the office, the amount of cajoling to get them to take our process seriously. I was making calls at the end of that saying, I'm so sorry, but you have to pay us another million dollars so that we can release this conditional commitment piece of paper.
Jamie Nolan: A call everyone wants.
Jigar Shah: Oh my God. People were like, we can't release this piece of paper until the check comes in, Jigar. And I was like, oh my God, what are we doing here? So I just think it's so important to recognize how important it is to have the air cover, and how important it is to have the very best people. When people are like, oh, she solved that in ten minutes, I'm like, no, she solved it in ten minutes and 25 years of work experience. That's how she solved it in ten minutes.
And I can't begin to thank the people who believed in us for that first year and a half. We had Monolith Materials, we had two other deals we had done in that first half of 2022. We still had not proven anything. But because of all of you, people gave us the benefit of the doubt and thought we actually could become really big and really important, even at that early stage.
Chris Creed: And two and a half years later, 56 deals, $108 billion in obligations. Towards the end, it was extremely difficult because we were unable to take new deals. We were just super busy. Those first two years were wild, that's for sure. The thing I remember the most is the people as well, and the quality of the people we worked with. You and I talked about this: they would fit in at Generate or at Goldman, because they were awesome people. And I will say, my experience broadly with the Department of Energy and the federal government was also very high. Something I took away from my experience was an enormous respect for the federal workforce. They put in amazing time, hours, expertise, and it was great to work with them for the three and a half years.
Jigar Shah: Well said.
Debrief
Jamie Nolan: Well, that was fun.
Jigar Shah: I love Chris Creed. And it was funny, because Chris had this beard when we left the Loan Programs Office, and I hated his beard, and he has shaved it. So I'm super excited about it. So petty of me, but I love it. And it was so funny, we did so much stuff during the Loan Programs Office that I think we only got through basically 2021 and a little bit of 2022.
Jamie Nolan: Yeah. It's really interesting, because when you think about it that way, the first two years and the final two years feel so different. And I'm really excited to talk about the second half, because that's when we really started to get some momentum and ramp up the speed of our work. But at the beginning, there was just really this sense that we were doing something so important, and that it was so valuable. And the whole industry outside of government, our friends in the private sector, were really cheering us on. They were really excited and could feel that things were changing, and that this was going to be a tool that I think people had counted out. They were just like, oh, it's not relevant, there's no credibility there, it's not something we can use. And then: huh, maybe I need to take a second look at that.
Jigar Shah: Yeah. And there's a difference between reading a business book and actually living through this experience. Part of what we got into, which admittedly bounced around a little bit, was because we were like, oh yeah, we did this one thing which turned out to be quite consequential, or this other thing that turned out to be quite consequential. I think people just don't understand the size of what we were doing, because these numbers get abstract. People have drawn roughly $70 billion of proceeds from the Loan Programs Office already, and they have another $70 billion that they have the right to draw. That number alone makes us the single largest provider of private credit to the energy industry globally. That's how big the Loan Programs Office is. And anyone else in the world that had $70 billion of outstanding loans like we have would have ten times the amount of staff.
Jamie Nolan: I just really have to say, I think one of your superpowers is recruiting. In your former life, you must have been a recruiter. One of my strongest memories from that time was when we started to come into the office and were doing all-hands meetings, and I was meeting some of these colleagues of mine, and the office got big really quick, and I certainly didn't know everyone. And as I was meeting people, it was all these folks from the private sector you were bringing in. It's really unusual. Government people are government people. They're mostly federal employees, they've been there for a really long time. Bringing in dozens of contractors from the private sector with deep sector expertise into government, that's not a thing that is done. And I kept meeting these people and being like, you were the CEO of what? We had a former ERCOT executive and the founder of Ripple Milk on our staff at LPO.
Jigar Shah: Adam Lowry, who started Method Soap and Ripple. And Bill Magness was the former head of the Electric Reliability Council of Texas, which runs the grid in Texas.
Jamie Nolan: Early on, I was like, how are you doing this? How are you convincing people to drop these very lucrative jobs and inspiring them to come in and coalesce around this mission, to rehabilitate this tool and get it up and running? It's the best team I've ever been a part of. Incredible talent. And you are a master at getting people behind the mission. That's one of the biggest things I remember from those first two years.
Jigar Shah: You're very kind. I remember there was a closing statement I'd make to people when I was trying to recruit them. I'd say, does your kid have any idea what you do for a living? And they were like, no, it's so weird. And I said, after you do this, your kid will be bragging about what you do for a living. And that came true. I'd say that every single person who worked for the Loan Programs Office, their kid had heard of the Loan Programs Office, their kids' friends had heard of the Loan Programs Office, and they were proud of their parent who worked at the Loan Programs Office.
Jamie Nolan: I don't know if they knew it was LPO, but they certainly heard about what we were doing. At the time, we were announcing all these major loans, particularly to companies that are household names, like the automakers. People knew about it. These were massive projects. We were creating thousands upon thousands of jobs, good manufacturing jobs, in red states like Kentucky and Tennessee. Our work certainly spoke for itself, if not necessarily the name of the office. It's not that catchy. And I don't know if you heard, but they have a different name now, and I think that it's even worse.
Jigar Shah: I have no idea what you're talking about. But I do know that Hayley Emerson wrote an extraordinary song about the Loan Programs Office, which is still on YouTube today, professing her love for the Loan Programs Office. And I'm there for it.