USDA Funds $22.8 Million for Rural Renewable Energy

U.S. Department of Agriculture (USDA) Secretary Mike Johanns was busy last week with announcements for $9.2 million in rural business development funding awards, and $22.8 million in pending awards to support investments in renewable energy and energy efficiency in the agriculture industry and rural small businesses.

A total of 26 loan and grant recipients in 14 states that will receive $9.2 million in rural business development funds (for the full list, see the first link below). In just one example, in Minnesota, the Freeborn-Mower Cooperative Service was awarded $400,000, which will go to fund the efforts of biodiesel manufacturer SoyMor. The grants and loans are awarded through USDA Rural Development to electric and telecommunications cooperative organizations, which in turn provide loans or grants to support local economic or community development efforts. These funds are also part of an important leveraging effort. The $9.2 million in USDA investments will be matched with $59.7 million in additional investments to support a variety of businesses and community ventures, including community facilities and infrastructure, improving access to local medical care and other projects that encourage a favorable climate for jobs and growth. Section 9006 of the 2002 Farm Bill established the Renewable Energy Systems and Energy Efficiency Improvements loan and grant program to encourage agricultural producers and small rural businesses to create renewable and energy efficient systems. The $22.8 million in funds will be available to support a wide range of technologies encompassing biomass, geothermal, hydrogen, solar, and wind energy, as well as energy efficiency improvements. Awards will be made available in two stages. One-half, $11.4 million, is available immediately for competitive grants. Renewable energy grant applications must be for a minimum of $2,500 and a maximum of $500,000. Energy efficiency grant applications may range from $2,500 to $250,000. The grant request may not exceed 25 percent of the eligible project cost, and applications must be submitted to the appropriate Rural Development State Office postmarked no later than June 13, 2005. Detailed information about application and program requirements will be included in the March 28, 2005 publication of the Federal Register. The remaining $11.4 million will be set aside through August 31, 2005 for renewable energy and energy efficiency guaranteed loans. Final details on how to apply for these funds will be published in the Federal Register later this year. Any funds not obligated under the guarantee loan program by August 31, 2005, will be reallocated to the competitive grant program as of that date. “Enhancing our energy efficiency is a key goal of the Bush Administration,” Johanns said. “Renewable energy is an exciting growth frontier for American agriculture. Implementing an innovative energy policy, which the President has proposed, provides an opportunity to strengthen both our national security and the rural economy.” USDA Rural Development’s mission is to deliver programs in a way that will support increasing economic opportunity and improve the quality of life of rural residents.


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