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State of New Mexico Rural Development Business & Cooperative Programs Welcome!

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Presentation on theme: "State of New Mexico Rural Development Business & Cooperative Programs Welcome!"— Presentation transcript:

1 State of New Mexico Rural Development Business & Cooperative Programs Welcome!

2 USDA Rural Development Rural Energy for America Program (REAP) Santa Fe, NM September, 2010

3 U.S. Department Of Agriculture Rural Development Mission: To increase economic opportunity and improve the quality of life for rural AmericansMission: To increase economic opportunity and improve the quality of life for rural Americans

4 Rural Development Over 40 grant, direct loan, and guaranteed loan programs to finance housing, businesses, and community infrastructure in rural areas. Program Areas: Rural Housing Service (RHS)Rural Housing Service (RHS) Rural Utility Programs (RUS)Rural Utility Programs (RUS) Rural Business-Cooperative Programs (RBS)Rural Business-Cooperative Programs (RBS)

5 Business & Cooperative Programs Business & Industry Guaranteed Loan Program (B&I-G)Business & Industry Guaranteed Loan Program (B&I-G) Intermediary Relending Program (IRP)Intermediary Relending Program (IRP) Rural Business Opportunity Grants (RBOG)Rural Business Opportunity Grants (RBOG) Rural Business Enterprise Grants (RBEG)Rural Business Enterprise Grants (RBEG) Rural Economic Development Loan/Grant Program (REDLG)Rural Economic Development Loan/Grant Program (REDLG)

6 Business & Cooperative Programs Value Added-Development Producer Grants (VAPG)Value Added-Development Producer Grants (VAPG) Small, Socially Disadvantaged Producer Group (SSDPG) GrantSmall, Socially Disadvantaged Producer Group (SSDPG) Grant Rural Cooperative Development GrantsRural Cooperative Development Grants

7 Energy Title in Farm Bills Farm Security and Rural Investment Act of 2002 (2002 Farm Bill) Food, Conservation, and Energy Act of 2008 (2008 Farm Bill)

8 Section 9003 Biorefinery Assistance Program Provides guaranteed loans for development and construction of commercial-scale biorefineries Maximum $250,000 million; no minimum Applying for remaining funds from 2009 by June 1, 2010

9 Section 9004 Repowering Assistance Payments to Eligible Biorefineries Provides financial incentives to biorefineries in existence on June 18, 2008 to replace the use of fossil fuels used to produce heat or power at their facilities by installing new systems that use renewable biomass, or produce new energy from renewable biomass Up to $5 million or 50% of project cost, whichever less

10 Section 9005 Bioenergy Program for Advanced Biofuels Support and ensure an expanding production of Advanced Biofuels by providing payments to Eligible Advanced Biofuel Producers in rural areas. Payments will be made to eligible Advanced Biofuel Producers for the production of fuel derived from renewable biomass, other than corn kernel starch.

11 Other Titles Section 9006: Biodiesel Fuel Education Program Section 9008: Biomass Research and Development Initiative

12 Section 9007 Rural Energy for America Program (REAP) REAP – Grants for Energy Audit and Renewable Energy Development Assistance REAP - Feasibility Study Grants REAP - Grants & Loan Guarantees for Renewable Energy Systems/Energy Efficiency Improvements Program

13 Section 9007 Rural Energy for America Program (REAP) REAP – Grants for Energy Audit and Renewable Energy Development Assistance – –Eligible entities include a unit of State, tribal, or local government; institutions of higher education; rural electric cooperatives; or a public power entity. – –Competitive grants up to $100,000 – –Closed July 26, Expect again in FY ‘11

14 Section 9007 Rural Energy for America Program (REAP) REAP – Grants for Energy Audit and Renewable Energy Development Assistance – –The program is designed to assist farmers, ranchers, and rural small businesses. – –Entities receiving assistance are expected to pay 25% of the cost of the energy audit or assistance.

15 Section 9007 Rural Energy for America Program (REAP) REAP - Feasibility Study Grants – –Eligible entities are agricultural producers and rural small businesses. Rural electric cooperatives may also be eligible to apply. – –Conduct feasibility studies for renewable energy systems – –25% of project costs up to $50, – –Open until October 5, Again in FY ’11.

16 Grants and Loan Guarantees (no direct loans) Purpose: Provide financial assistance to agricultural producers and rural small businesses for the purpose of purchasing and installing: 1. 1.Energy efficiency improvement* projects 2. 2.Renewable energy* systems Section 9007 Rural Energy for America Program (REAP)

17 Eligible Grantees/Borrowers Agricultural producers* or a rural* small businesses* US Citizens or entities with at least 51% ownership by US Citizens or legally admitted for permanent residence Section 9007 Rural Energy for America Program (REAP)

18 Project Eligibility Located in an eligible rural area Pre-commercial* or commercially available* and replicable technology Sufficient revenues to provide for operations and maintenance

19 Section 9007 Rural Energy for America Program (REAP) Project Eligibility Project must have technical merit Applicant must be the owner of the project and control the revenues and expenses of the project. Sites must be controlled by the agricultural producer or small business for financing

20 Section 9007 Rural Energy for America Program (REAP) Project Eligibility: Energy Efficiency—improvements that reduce energy consumption or energy consumed per square foot or unit processed in – –Facilities – –Buildings – –Processes EE to existing RE systems are eligible energy efficiency improvement projects.

21 Section 9007 Rural Energy for America Program (REAP) Includes such improvements as Replacing lighting, boiler, coolers, freezers, HVAC with more efficient systems Insulation, doors, windows Others! Just think efficiency! Energy audit if more than $50,000 project; Energy assessment if $50,000 or under

22 Section 9007 Rural Energy for America Program (REAP) Project Eligibility (cont.) Renewable Energy Systems—produce or produce and deliver energy from: – –Wind – –Solar (Electric and Thermal) – –Renewable Biomass, including anaerobic digesters – –Geothermal (Electrical and Direct Use)

23 Section 9007 Rural Energy for America Program (REAP) Project Eligibility (cont.) Renewable Energy Systems—produce or produce and deliver energy from: – –Ocean (tidal, wave, current, thermal) – –Hydroelectric – –Hydrogen – derived from renewable biomass or water using an energy source described above

24 Eligible Costs Post-application purchase and installation of equipment (new, refurbished, or remanufactured), except agricultural tillage equipment, used equipment, and vehicles Post-application construction or improvements, except residential Energy audits or assessments Permit and license fees

25 More Eligible Costs Professional service fees, except for application preparation Feasibility studies and technical reports Business plans Retrofitting Construction of new facility under certain circumstances IF loan guarantee, include working capital and land acquisition

26 Projects that are NOT Eligible Residential improvements Energy efficiency improvements related to new construction Agricultural tillage equipment Vehicles

27 Grants Grants are limited to 25% of eligible project cost, NTE $500,000 grant for renewable energy systems and $250,000 for energy efficiency projects Minimum grant for energy efficiency is $1,500 and for renewable energy $2,500 Set-aside for grants of $20,000 or less

28 Loan Guarantees Guaranteed Loan Guaranteed loans and Guaranteed Loan/Grant combination are limited to 75% of eligible project cost with grant portion not to exceed 25% Maximum Guaranteed loan is $25 million

29 Loan Guarantees Loan Guarantee Percentages 85% guarantee for loans ≤ $600,000 80% guarantee for loans ≤ $5 million 70% guarantee for loans ≤ $10 million 60% guarantee for loans > $10 million and up to $25 million

30 Loan Guarantees Interest Rates Rates are negotiated between lender and borrower Fixed or variable Loan Terms 7 years max. for Working Capital 20 years max. for M&E 30 years max. for Real Estate

31 Loan Guarantees Applications Application for Loan Note Guarantee Simplified Application for loans ≤ $600,000 Lender’s commercial loan application and analysis Environmental Report Technical Report/Energy Audit Feasibility Study

32 Scoring Criteria 1. 1.Quantity of energy replaced, produced, or saved 2. 2.Environmental benefits 3. 3.Commercial availability 4. 4.Technical merit 5. 5.Readiness 6. 6.Small agricultural producer/very small business

33 Technical Report Follows standard project development process Process distilled to 10 discrete elements Each element custom tailored to technology and scale---

34 Technical Requirements 10 Sections Qualifications of project teamQualifications of project team Agreements and permitsAgreements and permits Resource assessmentResource assessment Design and engineeringDesign and engineering Project development scheduleProject development schedule Financial feasibilityFinancial feasibility Equipment procurementEquipment procurement Equipment installationEquipment installation Operations and maintenanceOperations and maintenance DecommissioningDecommissioning

35 Feasibility Study vs. Energy Audit: Where do they fit in? Energy audit required for EE projects > $50,000; otherwise, energy assessment is okayEnergy audit required for EE projects > $50,000; otherwise, energy assessment is okay Business level feasibility study required for all RE projects > $200,000Business level feasibility study required for all RE projects > $200,000 Audits and Feasibility Studies must be consistent with the technical requirements (same project, same information)Audits and Feasibility Studies must be consistent with the technical requirements (same project, same information) Audits and Feasibility Studies do not replace the Technical ReportAudits and Feasibility Studies do not replace the Technical Report

36 Feasibility Study Evaluates business level impact of the project Evaluates economic, market, technical, financial, and management feasibility Information contained within the study may be referred to, rather than repeated, in the technical report Conducted by qualified 3 rd party consultant

37 Energy Audit Critical to Technical ReportCritical to Technical Report –Provides basis for energy savings and financial feasibility –Information in the Audit can be referenced, rather than repeated, in the Technical Report Who conducts them?Who conducts them? –Certified Energy Manager or Professional Engineer”

38 Environmental Review Every application requires an environmental review pursuant to the National Environmental Policy Act (NEPA) Discuss your project with USDA, Rural Development well before the application deadline so we can begin the process.

39 Ways to Submit Online at grants.gov Hard copy to state office

40 Application Deadlines Applications deadlines are listed in the Federal Register Notice of Funds Availability (NOFA) or Notice of Solicitation of Applications (NOSA) Guaranteed Loan applications are taken year round.

41 Additional Information USDA Rural Development USDA Rural Development Section 9007 Renewable Energy for America Program (REAP) Website

42 How to Contact Us (this address is the state office) G. Mike McDow, Program Director Business & Cooperative Programs 6200 Jefferson St. NE, Room 255 Albuquerque, NM (505)

43 How to Contact Us (this address is the state office) Jesse Monfort Bopp Rural Energy Coordinator 6200 Jefferson St. NE, Room 255 Albuquerque, NM (505)

44 How to Contact Us (this address is the state office) Clinton A. Kaasa, Loan Specialist Business & Cooperative Programs 6200 Jefferson St. NE, Room 255 Albuquerque, NM (505)


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