Trump's Rollback of Green Policies Puts $300 Billion Infrastructure Fund at Risk of Suspension

Suspension of Funding Related to IRA and Infrastructure Act
IRA Tax Credit Benefits to Continue

With President Donald Trump entering the White House, the fate of the $300 billion (431 trillion won) green infrastructure fund has also become uncertain. Due to President Trump's executive orders, loans that had already been scheduled for disbursement to infrastructure development companies have been halted. These measures targeting clean energy are seen as an attempt to roll back the clean energy policies of the previous Biden administration.

On January 22 (local time), the Financial Times (FT) reported, after analyzing data related to U.S. Department of Energy (DOE) loans, that the implementation of approximately $330 billion (about 473 trillion won) in funding is now in question. This includes $50 billion (about 71 trillion won) in loans already approved by the DOE under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act, as well as $280 billion (about 402 trillion won) in loan requests currently under review. Both the IRA and the Infrastructure Act were initiatives promoted by the previous Biden administration to support eco-friendly vehicles.

Since taking office, President Trump has signed dozens of executive orders reversing Biden administration policies, including orders to halt federal spending for manufacturers and infrastructure developers. In an executive order titled "Unleashing American Energy," President Trump stated, "All agencies must immediately cease the disbursement of funds allocated under these laws."

Due to President Trump's directive, it is now uncertain whether a $9 billion (about 13 trillion won) conditional loan to DTE Energy, the largest power company in the southeastern United States, and a $3.5 billion (about 5 trillion won) loan to PacifiCorp, owned by Warren Buffett, will actually be executed.

Rob Barnett, a senior analyst at Bloomberg Intelligence, stated, "If subsidies and loan guarantees linked to the IRA have not yet been paid out, it will be very difficult to see that money disbursed under the Trump administration."

Shay Natarajan of New York private equity fund Mobility Impact Partners said, "This executive order suggests that federal funding for EV and battery manufacturing will become more difficult, and that financing for manufacturing projects already underway will also face challenges."

Unlike loans disbursed by the DOE's Loan Programs Office (LPO), the FT predicted that tax credit benefits under the IRA would not be affected by this executive order.

According to the FT, investors are concerned that, as a result of President Trump's actions, the future disbursement of the $300 billion green infrastructure fund (most of which is sourced from the Infrastructure Act) by the federal government may also be frozen.