USDA ANNOUNCES $10 BILLION INVESTMENT IN RURAL RENEWABLE ENERGY PROJECTS
The U.S. Department of Agriculture (“USDA”) recently announced that it will distribute up to $10.7 billion in loans and grants for rural electric utilities to implement renewable energy projects. This money could drive renewable energy investment throughout Nebraska.
The New Empowering Rural America program (“New ERA”) makes up the majority of the investment. New ERA is part of the Inflation Reduction Act (the “Act”) Congress passed in August 2022. (For additional details on the Act, see this article).
Renewable energy companies, electric utilities and cooperatives that serve predominantly rural areas may apply for funding from New ERA. New ERA includes a broad range of eligible projects from small scale efficiency improvements to construction of new generation systems.
Applicants can choose to apply for loans, grants or a combination of both. Interest rates for the loans are either the U.S. Treasury rate or a fixed rate as low as two percent. Projects that serve distressed or disadvantaged rural communities are eligible for interest-free loans. Direct grants can fund up to 25 percent of the total project cost.
The Powering Affordable Clean Energy program (“PACE”) will provide an additional $1 billion in partly forgivable loans to finance renewable energy projects. Corporations, utilities, cooperatives, Indian Tribes and nonprofits for projects serving predominantly rural communities may apply to PACE. PACE-eligible projects can receive forgiveness for 20 to 40 percent of the loans funding the project.
Under either program, applicants must first submit a letter of interest to the Rural Utility Service Division of USDA to evaluate the project’s eligibility. Eligible applicants will receive an invitation to apply. USDA will accept applications for the New ERA program from July 31, 2023 to August 31, 2023, and for the PACE program from June 30, 2023 to September 29, 2023.
Hannes D. Zetzsche
Aden J. Davis, Summer Associate