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Donald Trump’s return to the White House has placed more than $300bn of potential federal infrastructure funding in jeopardy, sending tremors through the US investment community as they wrestle with his swift dismantling of Joe Biden’s climate agenda.
The newly inaugurated president’s immediate actions included signing numerous executive orders to reverse Biden’s policies, with a crucial directive halting federal disbursements to manufacturers and infrastructure developers. The affected funds, allocated under Biden’s landmark Inflation Reduction Act and bipartisan infrastructure law, encompass nearly £50bn in approved Department of Energy loans and an additional £280bn in loan applications under review.
The executive order, titled “Unleash American Energy,” mandates all agencies to “immediately pause the disbursement of funds appropriated” through these acts. This dramatic move places significant projects at risk, including a £9bn conditional loan to Michigan-based DTE Energy and a £3.5bn facility for Oregon’s PacifiCorp.
Market analysts suggest this policy shift will severely impact pending federal funding. Rob Barnett from Bloomberg Intelligence noted that securing funding tied to the IRA would be exceptionally challenging under the Trump administration. The clean energy sector has been particularly rattled, with Trump’s actions signalling a determined effort to undermine Biden’s industrial policy and energy transition programmes.
The implications extend beyond immediate funding concerns. Nearly 25GW of offshore wind projects, representing 65% of US developments in planning, are now unlikely to progress under Trump’s administration. This policy upheaval has already prompted international investors to reconsider their commitments, with German energy giant RWE scaling back US wind power plans and Italian cable manufacturer Prysmian Group abandoning factory construction plans in Massachusetts.
While the IRA’s tax credits remain largely protected, the broader impact on investor confidence could prove significant. Industry experts warn that this instability might permanently damage the United States’ ability to attract capital for renewable energy projects, potentially ceding ground in the global race for green technology leadership
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