Federal Department of Energy withdraws conditional $4.9 billion loan guarantee for Grain Belt Express project
U.S. Department of Energy Cancels $4.9 Billion Loan for Grain Belt Express Project
The U.S. Department of Energy (DOE) has terminated its conditional loan commitment for the Grain Belt Express Phase 1 transmission project, citing a need for more responsible stewardship of taxpayer resources [1][3][4]. The Grain Belt Express, a planned 800-mile transmission project from Kansas to Illinois, was set to be developed by Chicago-based Invenergy [1][3].
Invenergy had planned to build the project in phases and had already awarded nearly $1.7 billion in contracts to engineering and infrastructure services companies Quanta Services and Kiewit Energy Group [1][3]. Despite these efforts, the DOE found that the financial conditions necessary to issue the loan guarantee were unlikely to be met, and concluded that it was not critical for the federal government to support the project [1][3][4].
The cancellation stems from unresolved issues around project milestones and contractual conditions precedent, which were not met swiftly enough to align with the government’s expectations, particularly under the Trump administration’s priorities [2]. DOE's undersecretary cited a broad requirement for "a satisfactory due diligence review" that was not satisfactorily completed, allowing DOE to cancel the loan at its sole discretion [2].
Opposition from Republicans was significant in this decision. Missouri Republican leaders, including Attorney General Andrew Bailey and Senator Josh Hawley, publicly urged cancellation. Bailey criticized the project's business case as "highly biased in favor of over-building transmission," and Hawley engaged directly with President Trump and Energy Secretary Chris Wright to push for termination of the loan guarantee [1].
Grain Belt Express developers have denied claims that the project will cost billions, stating instead that it will save billions in energy costs [2]. Invenergy aims to begin construction next year on the portion of the project connecting Kansas and Missouri.
| Aspect | Details | |----------------------------------|------------------------------------------------------------------------------------------| | Reason for DOE Loan Termination | Conditions precedent for loan guarantee (financial and contractual milestones) unlikely to be met; due diligence not satisfactory; federal support deemed unnecessary[1][2][3] | | Invenergy's Role and Actions | Developer awarding nearly $1.7B contracts; plans phased build to connect Kansas to Illinois; projects $52 billion in savings over 15 years[1][3] | | Republican Opposition | Missouri AG Bailey called for cancellation citing biased transmission planning; Senator Hawley pushed administration directly to cancel loan[1] |
This cancellation occurred under the Trump administration, which scrutinized and moved to cancel several DOE loans from the prior Biden administration, reflecting a policy shift towards more conservative stewardship of federal funds and skepticism about clean energy infrastructure subsidies [2][3].
The U.S. Department of Energy's decision to cancel the loan for the Grain Belt Express Project was partly due to concerns about meeting the financial and contractual conditions necessary to issue the loan guarantee, which were deemed unlikely [1][2][3]. Despite Invenergy's plans to build the project in phases and their efforts to secure financing, the energy sector's financial performance played a crucial role in the DOE's decision to terminate the loan [1][3].
