The US Department of Energy (DOE) has announced the largest loan package in its history, closing a $26.5 billion loan to two subsidiaries of Southern Company in Georgia and Alabama.

The loan will be delivered by the DOE’s Office of Energy Dominance Financing (EDF) and will support Georgia Power and Alabama Power in building out and upgrading more than 16GW of firm power to both states' grids. The 16GW is comprised of 5GW of new gas generation, 6GW in nuclear improved through uprates and license renewals, hydropower modernization, battery energy storage systems, and more than 1,300 miles of transmission and grid enhancement projects.

"These investments will support the extraordinary and transformative projected growth we're seeing across our company. These loans will help lower the cost of investments in our grid that will enhance reliability and resilience for the benefit of our customers," said Chris Womack, chairman, president, and CEO of Southern Company. "At Southern Company, we are focused on serving growth while maintaining rate stability and driving long-term savings for customers.”

The loans are expected to have a tenor of roughly 30-years.

“Thanks to President Trump and the Working Families Tax Cut, the Energy Department is lowering energy costs and ensuring the American people have access to affordable, reliable, and secure energy for decades to come,” said Energy Secretary Chris Wright.

“The President has been clear: America must reverse the energy subtraction agenda of past administrations and add more reliable power generation to our electrical grid. These loans will not only lower energy costs but also create thousands of jobs and increase grid reliability for the people of Georgia and Alabama.”

The investments come as both states are experiencing a significant uptick in data center growth, with Southern Company predicting approximately 10GW of contracted load growth across the region in 2026. Georgia is the regional epicenter of this growth, with several large-scale data centers in development across the state. Georgia Power has said that more than 90 percent of its large load growth is from data center customers.

Notable investments in the state include an $11bn commitment by Amazon Web Services (AWS) into data centers in Georgia.

Microsoft is also building several data centers in the Atlanta area, including in East Point and Palmetto in Fulton County, and Douglasville, Douglas County, having announced plans for a Georgia cloud region in 2021.

Geothermal Investment

The DOE also announced a $171.5 million funding opportunity to support next-generation geothermal field-scale tests for both electricity generation and exploration drilling.

The funding opportunity will include six distinct topics with different levels of funding and awards. In the first round, two of the six topics will be open, seeking field tests for enhanced geothermal systems and drilling for next-generation and hydrothermal resource characterization/confirmation.

Letters of Intent for the opportunity are due March 27, 2026, and full applications are due April 30, 2026. Further information on how to apply is available here.

“Work under this opportunity will directly support our commitments to advance energy addition, reduce energy costs for American families and businesses, and unleash American energy dominance and innovation,” said DOE assistant secretary of the Hydrocarbons and Geothermal Energy Office Kyle Haustveit.

“Thanks to President Trump's America First Energy Agenda, these demonstrations and drilling activities will help us realize the enormous potential of geothermal to spur domestic manufacturing, enable data center growth, and provide affordable, reliable, and secure energy solutions nationwide.”

Several of the major hyperscalers have backed enhanced (next generation) geothermal companies as they seek to diversify their power consumption profile.

Google was one of the first to back a next-generation geothermal firm in June 2024, signing a deal with Fervo Energy to support the development of 100MW of geothermal power in Nevada, which will then be supplied to Google’s data centers in the region. The company followed this up earlier this month with a 150MW PPA with Ormat Technologies, also in Nevada.

Meta has also backed the sector, signing two 150MW deals with enhanced geothermal firms Sage Geosystems and XGS.