August 31, 2020
BY Erin Krueger
The USDA on Aug. 31 announced the implementation of the agency’s OneRD Guarantee Loan Initiative and released new information on rates and terms that will help lenders apply for loan guarantees to support rural businesses, infrastructure and community facilities.
The agency released a final rule on the initiative on July 13, noting the program aims to make it easier for lenders to access four guaranteed loan programs, including Rural Energy for America Program, the Water and Waste Disposal Loan Guarantees Program, the Community Facilities Guaranteed Loan Program, and the Business and Industry Guaranteed Loan Program.
The REAP program is of particular interest to those in the biofuels and bioenergy industry. It provides loan guarantees and grant funding to agricultural producers and rural small businesses for renewable energy systems or to make energy efficiency improvements. Solid biomass, biogas, and biofuel projects are among the renewable energy systems that are eligible for the program.
Advertisement
Advertisement
As part of the OneRD Guarantee Loan Initiative, the USDA said it is standardizing requirements for credit reviews, loan processing, loan servings and loss claims. The agency said these measures will make the application process simpler and faster for lenders. The changes include a common loan note guarantee application and consistent forms for lenders to use across the four programs.
In July, the agency also said it plans to issue loan note guarantees to lenders within 48 hours after they provide documentation to prove the requirements of the conditional commitment have been met. The USDA will also provide guarantee percentage and fee requirements to lenders through a single annual notice at the beginning of each fiscal year and allow lenders to obtain approval for a loan guarantee prior to the beginning of construction projects. The agency will also provide automatic approval to lenders in good standing who are supervised or created by state or federal regulatory agencies to participate in all four programs, while non-regulated lenders may seek approval to participate through a single certification process that will be valid for five years.
Advertisement
Advertisement
In the announcement issued Aug. 31, the USDA said that it is providing guarantee percentages, annual fees, periodic retention fees, and optional construction fees ahead of fiscal year 2021 to help lenders apply for the four impacted loan guarantee programs.
For the REAP program, the loan guarantee fee is set at 1 percent, the periodic guarantee retention fee is 0.25 percent, the loan guarantee percentage is 80 percent and the fee for issuance of the loan note guarantee prior to construction completion is 0.5 percent. Fees contained in the notice are effective Oct. 1.
Additional information is available on the USDA website.
The U.S. Department of Energy Bioenergy Technologies Office (BETO) announced up to $23 million in funding to support research and development (R&D) of domestic chemicals and fuels from biomass and waste resources.
The U.S. DOE has announced its intent to issue funding to support high-impact research and development (R&D) projects in two priority areas: sustainable propane and renewable chemicals and algal system cultivation and preprocessing.
Sens. Sherrod Brown, D-Ohio, and Pete Ricketts, R-Neb., in August introduced the Renewable Chemicals Act, a bill that aims to create a tax credit to support the production of biobased chemicals.
The Chemical Catalysis for Bioenergy Consortium, a consortium of the U.S. DOE’s Bioenergy Technologies Office, has launched an effort that aims to gather community input on the development of new biomass processing facilities.
USDA on March 8 celebrated the second annual National Biobased Products Day, a celebration to raise public awareness of biobased products, their benefits and their contributions to the U.S. economy and rural communities.