A loan contract with an eligible state agency for a small scale local energy project may be made in the form of an intergovernmental agreement under ORS chapter 190. The agreement shall set forth, among other matters, that:
(1) The small scale local energy project shall be security for the loan.
(2) The applicant pledges to request each biennium during the term of the loan, spending authorization or appropriation of funds from the Legislative Assembly or pledges to otherwise provide funds sufficient to pay the loan payments due that biennium.
(3) If applicable, the pledge of the applicant to repay the loan shall be contingent upon the continued spending authorization or appropriation by the Legislative Assembly of funds sufficient to pay the loan.