USDA: $400 million still available for REAP loan guarantees

By Erin Voegele | July 18, 2019

The USDA announced July 18 that more than $400 million is still available for renewable energy system and energy efficiency loan guarantees through the Rural Energy for America Program. USDA accepts applications for REAP funding year-round.  

REAP funding can be used to install renewable energy systems, including anaerobic digesters, biomass, geothermal, hydropower, wind and solar. The program can also be used to make energy efficiency improvements to heating, ventilation and cooling systems; insulation; and lighting and refrigeration.

“Under the leadership of President Trump and Agriculture Secretary Perdue, USDA is committed to increasing economic development in rural communities across the country through strong partnerships with rural businesses,” said Joel Baxley, acting assistant to the secretary for rural development. “USDA’s Rural Energy for America Program (REAP) is an important tool to help strengthen and grow the rural economy.”

The REAP program is open to agricultural producers with at least 50 percent of gross income coming from agricultural operations and to small businesses located in eligible rural areas.

Both grants and loan guarantees are awarded through REAP. The program offers loan guarantees on loans up to 75 percent of total eligible costs. Grants can also be awarded for up to 25 percent of total eligible costs. Combined grant and guaranteed loan funding is allowed up to 75 percent of total eligible project costs.

The USDA offered an example of a biogas project supported through the REAP program. In Magnolia, North Carolina, Optima KV received a $6.5 million loan guarantee for an anaerobic digester that will process hog waste. The project aggregates multiple biogas streams at a refinery. The resulting renewable natural gas (RNG) is transported via pipeline to a power plant to generate electricity. The USDA said the digester project produces additional revenue for hog farmers and creates a cleaner environment.

Potential applications are encouraged to contact their state USDA Rural Development office for additional information.