Several receive USDA Rural Development grants

By | November 10, 2006
The USDA's Rural Development branch named recipients for Renewable Energy and Energy Efficiency Improvement Program grants totaling $17.5 million for projects in 36 states.

Established in the 2002 Farm Bill, the grant program awards money to farmers, ranchers and rural small businesses that demonstrate a financial need for projects that derive energy from wind, solar, biomass or geothermal sources; or hydrogen derived from biomass or water using wind, solar or geothermal energy sources. The funds can be used for the purchase and installation of equipment, construction and improvements, energy audits, permit fees, professional service fees, feasibility studies, business plans, and retrofitting.

The majority of recipients were Nebraska-based companies, including Northeast Nebraska Biodiesel LLC (NNB). This company, comprised of seven farmers in Tekamah, Neb., was allotted $500,000-the maximum dollar amount-to produce biodiesel.

"[This grant] is huge because we are starting in a new industry," said Tim Gregerson, secretary for Northeast Nebraska Biodiesel. "We are going to be the first commercial biodiesel plant in Nebraska, While we are only going to produce 5 MMgy, which is small, it is huge as far as giving us dollars to put toward getting started."

The NNB was one of six projects that received funds specifically for biodiesel production. Northwood Mills LLC in Northwood, N.D., received $500,000 for biodiesel manufacturing and has plans to build a soybean crushing facility and biodiesel plant north of town. The company said it will use the money to construct a soy oil refinery along with the biodiesel plant, according to Clarence Leschied, operations manager for Northwood Mills. Both he and Paul Sproule, president of Northwood Mills, were grateful for the USDA grant.
"The big thing is that it's a grant that comes in as equity, so it strengthens our position with shareholders and the bank, and will hopefully help us get the latest technology and build a larger facility," Lescheid said.

Other biodiesel projects that received funding included: Alascanola, a canola-based biodiesel plant project in Alaska; Alabama Bioenergy LLC, a soy-based biodiesel plant project in Alabama; Global Fuels LLC, a 3 MMgy biodiesel plant project in Missouri; and Northern Biodiesel Inc., a 5 MMgy batch biodiesel plant project in New York.

As part of section 9006 of the 2002 Farm Bill, the program also provides loan guarantees up to $10 million to fund up to 50 percent of eligible projects. Rural Development grant funds can be used to pay for up to 25 percent of the eligible project costs. Since the program was implemented in 2003, the USDA has provided at least $87.3 million in grants and $34.3 million in loan guarantees to 844 applicants.

The grant program complements the Bush administration's overall effort to increase America's energy independence through the development of renewable energy resources, as well as improving efficiency of existing systems, according to the USDA.
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