Flint Energy to receive $1.2B loan from U.S. government to fund energy development
The U. S. Department of Energy (DOE) on Tuesday approved a $1 billion loan from the U.s.
Treasury to finance the development of the Flint River Power Authority (FLPRA) and related infrastructure.
The loan is part of a $3 billion package announced last month by Gov.
Rick Snyder to fund the Flint Water Crisis, which has left the city in dire straits.
The state has also agreed to provide Flint residents with $750 million in cash assistance and $1 million in non-recourse loans for future projects.
Flint’s mayor, Karen Weaver, said the agreement “will create millions of dollars in investment to help Flint’s future and keep our communities safe.”
The loan guarantees funds for up to six years for Flint River Utilities Inc. (FRU), which is a wholly-owned subsidiary of the company that owns Flint’s power grid, to construct and install infrastructure.
Flint Utilities’ operations are largely under state control and the company’s loan guarantees will help it build and maintain the grid.
FRU is required to repay the loan at a scheduled date of 2023.
FRUs utility and other facilities will be owned by Flint Energy, a private equity firm based in New York City.
Flint Energy is the largest private equity investor in Flint, and it was among the first private companies to be selected for a $5.7 billion federal stimulus package.
Flint has been hit by a string of high water and sewer contamination incidents, including lead poisoning from lead pipes and the Flint river.
A $400 million citywide cleanup program led by the U-M Center for Investigative Reporting (CIR) has helped clean up contaminated water and sewers in Flint but not all of the city’s water systems are operational.
Flint remains under a state of emergency imposed in May, when the governor ordered water treatment plants to be shut down and emergency personnel deployed to combat the lead contamination.
A second federal funding package is expected to be announced on Thursday.