USDA Announces Renewable Energy Loan Guarantees

U.S. Department of Agriculture (USDA) published the final rule for the Section 9006 Renewable Energy Systems and Energy Efficiency Improvements Grant, Guaranteed Loan, and Direct Loan Program (7 CFR Part 4280.) The Rural Business-Cooperative Service (RBS) of USDA expects to have up to an estimated $200 million available in guaranteed loan funds (at an $11.4 million cost to the government.)

The $11.4 million set aside for loan guarantees was part of Secretary Johanns’ March announcement of $22.8 million available for the Sec. 9006 Grant and Loan Guarantee Program. Half of the program’s funds are reserved for grant applications, which were due June 27, 2005. The second $11.4 million for loan guarantee applicants will be set aside until August 31, 2005. Any funds not obligated by the end of August will be transferred to the competitive grant program. USDA has made some changes to the application process for the Section 9006 program. Specifically, the minimum application level for the loan guarantee program is $5,000 and the maximum is $10 million. For loans equal to or less than $600,000, the applicant will complete the “short form” (Form RD-4279-1A) used for the Business and Industry (B&I) Loan Guarantee Program. Loan guarantees can be for up to 85 percent of loans for $600,000 or less, up to 80 percent for loans of $600,000 to $5 million, and 70 percent for loans of $5 million to $10 million. Applicable renewable energy technologies include: small- and large-scale solar electric, solar thermal, and wind energy projects; energy derived from biomass (including biofuels and anaerobic digestion); hydrogen; and geothermal for both direct use and electric generation. A final rule has not been completed for the authorized Direct Loan Program. USDA states in the Federal Register notice that it “is still evaluating the resources necessary to administer the program.” If the evaluation is positive, USDA will issue a final rule for the program subsequently. For a copy of the Federal Register Notice, see the following link (.pdf)
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