Businesses and farmers in rural Iowa looking to create renewable energy or make energy-saving improvements to their facilities or farms may be able to finance up to 75% of eligible project costs through the USDA Rural Development Agency's grant and guaranteed loan program. The 2009 version of the program has been announced by USDA.
A total of $55 million is available nationwide in 2009 for the Rural Energy for America Program, or REAP, in the 2008 Farm Bill.
"We strongly encourage interested businesses and farmers to begin working on their 2009 applications now," says Tim Helmbrecht, acting director for USDA Rural Development in Iowa. "Extensive information is available on our Web site to help with the application process including templates, guidelines and other important resources."
Good reason to start your application now
Application deadlines and the official Notice of Funds Availability (NOFA) for 2009 funding will be published in the Federal Register at a future date. "However, waiting to start your application until after the deadline is announced may not allow you enough time to complete all parts of your application," he says.
New to the program this year is that a guaranteed loan, or a combination guaranteed loan and grant, can be awarded for up to 75% of total eligible costs. The previous maximum was 50%. Also, stand-alone grants can be awarded up to 25% of total eligible costs. Last year a record 167 rural businesses and farmers in Iowa received nearly $14.3 million through this energy-saving program.
* Examples of renewable energy projects include wind, solar, biomass, bio-energy, biogas (anaerobic digestion), geothermal or hydroelectric.
* Examples of energy-efficiency projects include improvements to facilities, buildings or processes that reduce energy consumption such as increasing the R-value of sidewalls or ceilings, adding environmental computer controllers, or installing more efficient heating systems, windows, doors, lighting, ventilation systems, cooling system equipment, pumping systems, commodity handling systems, grain drying systems, etc.
What does it take for you to qualify?
To qualify for financial assistance through REAP, the total project costs must be greater than $6,000 for energy-efficiency projects and $10,000 for renewable energy projects. Restaurants, grocery stores, bakeries, greenhouses, cold storage businesses, ethanol plants, manufacturing facilities, as well as any other business that requires a large amount of energy to operate, may benefit from an energy-efficiency upgrade.
"This program can make a big difference to rural small businesses or farmers looking to finance a renewable energy system or make energy-saving improvements to their facility or equipment," says Helmbrecht.
Agricultural tillage equipment, used equipment and vehicles are not eligible. Purchases made or construction started before submitting an application is not eligible. In addition, funds are not available for residential use.
How to contact USDA Rural Development
Further information about this and other Rural Development programs is available by calling 515-284-4663, or visit a local Rural Development office or go online to www.rurdev.usda.gov/ia.
Eleven USDA Rural Development offices in Iowa serve the 1.9 million Iowans living in rural communities and areas. Office locations include a state office in Des Moines, along with area offices in Albia, Atlantic, Humboldt, Indianola, Iowa Falls, Le Mars, Mount Pleasant, Storm Lake, Tipton and Waverly.
USDA Rural Development is an equal opportunity lender with a variety of direct and guaranteed lending programs involving single and multifamily housing, community facilities, water and sewer development and business and industry programs. Rural Development's mission is to deliver quality programs in a way that will support increasing economic opportunity and improve the quality of life of rural residents. As a venture capital entity, Rural Development provides equity and technical assistance to finance and foster growth in home ownership, business development, and critical community and technology infrastructure.