CONTENTSForeword 3
Acknowledgements 5
IndexesofFederalFinancingProgramsforCleanEnergy 6
• FederalFinancingProgramsforCleanEnergybyAdministeringAgency• FederalFinancingProgramsforCleanEnergybyProgramType
ProfilesofFederalFinancingPrograms 11forCleanEnergybyAgency
• UnitedStatesDepartmentofEnergy(DOE)• OverseasPrivateInvestmentCorporation(OPIC)• UnitedStatesAgencyforInternationalDevelopment(USAID)• UnitedStatesDepartmentofAgriculture(USDA)• UnitedStatesDepartmentofHousingandUrbanDevelopment(HUD)• UnitedStatesDepartmentofState(STATE)• UnitedStatesDepartmentofTransportation(DOT)• UnitedStatesDepartmentoftheTreasury(TREASURY)• UnitedStatesEnvironmentalProtectionAgency(EPA)• UnitedStatesSmallBusinessAdministration(SBA)
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE1
FOREWORD
FederalFinancingProgramsforCleanEnergyisaresourceguidetoU.S.governmentprogramsthatsupportthedevelopmentofcleanenergyprojectsintheU.S.andabroad.Theprogramslistedhereareresourcesthatcansupportcleanenergydeployment,andinturnleadtonewinvestment,jobcreation,andadditionalbenefitsthatcaninvigoratecommunities.Businessowners,homeowners,investors,policymakers,andotherscanusethisguideasa“YellowPages”tofederalprograms.Foreveryprogramlisted,theguideidentifiesadditionalcontactinformationtoanswerquestionsandprovideadditionaldirection.Insomesituations,thefinancingprogramslistedarespecificallydesignedtosupportenergy-relatedprojects.Inothercaseshowever,energyefficiencyandcleanenergyareamongmanyqualifyingpurposesfortheparticularfinancingprogram.ThisguideisacompaniontotheDatabaseforStateIncentivesforRenewableEnergyandEnergyEfficiency(DSIRE),whichprovidesstate-specificinformationonincentivesandpoliciestosupportcleanenergyandenergyefficiencyintheUnitedStates.MoreinformationonDSIREisavailableatwww.dsireusa.org.AdditionalinformationisavailablethroughtheU.S.DepartmentofEnergyanditsCleanEnergyInvestmentCenter(CEIC).MoreinformationontheDOEfinancingprogramsandtheCEICisavailableatwww.energy.gov/finance.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE3
ACKNOWLEDGEMENTS
LeadauthorsofFederalFinancingProgramsforCleanEnergyareKennethAlstonandKatySartoriusoftheU.S.DepartmentofEnergy.Specialappreciationgoesouttoexpertsandcollaboratorsacrossthefederalgovernment,including:JohnMacWilliams,MarkMcCall,NidhiThakar,SydneySchneir,BrianMahar,DanielBicknellandRishiSahgalattheU.S.DepartmentofEnergy;BethanyLesserandNadiaRhaziattheOverseasPrivateInvestmentCorporation;JeffreyHaeni,AndrewGisselquist,GeetaUhl,andClaireEverhartattheU.S.AgencyforInternationalDevelopment;TrevorReuschelandDougO’BrienattheU.S.DepartmentofAgriculture;SoniaBrubakerandGeorgeAmesattheU.S.EnvironmentalProtectionAgency;CrystalBergemannattheU.S.DepartmentofHousingandUrbanDevelopment;JohnMillerandLindaReillyattheU.S.SmallBusinessAdministration;AnnShikanyattheU.S.DepartmentofTransportation;andRosaMartinezattheU.S.DepartmentofTreasury.AdditionalthanksalsogoestotheOfficeofManagementandBudgetfortheirguidance.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE5
FEDERALFINANCINGPROGRAMSFORCLEANENERGYBYADMINISTERINGAGENCY
U.S.DepartmentofEnergy 11
• LoanProgramsOffice(LPO) 13• LPO:TitleXVIIInnovativeCleanEnergyLoanGuaranteeProgram 14
� TitleXVIICaseStudy 21• LPO:AdvancedTechnologyVehiclesManufacturing(ATVM)DirectLoanProgram 22
� ATVMCaseStudy 24• EnergySavingsPerformanceContractsforFederalBuildings 25
OverseasPrivateInvestmentCorporation 27
• DebtFinancing 29• PoliticalRiskInsurance 30• SupportForPrivateEquityFunds 31
� OPICCaseStudy 32
U.S.AgencyforInternationalDevelopment 33
• DevelopmentCreditAuthority 35• DevelopmentInnovationVentures 37
U.S.DepartmentofAgriculture 39
• EnvironmentalQualityIncentivesProgram 41• Multi-FamilyHousingEnergyEfficiencyInitiative 43• RepoweringAssistanceProgram 46• RuralDevelopmentBioenergyProgramforAdvancedBiofuelsPaymentProgram 48• RuralDevelopmentBiorefinery,RenewableChemical,andBiobasedProduct
ManufacturingAssistanceProgram 50• RuralDevelopmentLoan&GrantAssistance(SeveralPrograms) 52• RuralEnergyforAmericaProgram 56• TheRuralUtilitiesService:ElectricLoanProgram 58• TheRuralUtilitiesService:EnergyEfficiency&ConservationLoanProgram 60• TheRuralUtilitiesService:HighEnergyCostGrantProgram 61• TheRuralUtilitiesService:RuralEnergySavingsProgram 63
� AdditionalUSDALocalImplementationInformation 64
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE6
U.S.DepartmentofHousingandUrbanDevelopment 65
• EnergyEfficientMortgageProgram 67• FHARiskSharing 69• MultifamilyHousing 71• PublicHousingCapitalFund 73• PublicHousingEnergyPerformanceContracts 75• RehabilitationMortgageAssistance:Section203(k)Loans 76• Section108LoanGuaranteeProgram 78
� HUDCaseStudy 81� AdditionalHUDLocalImplementationInformation 82
U.S.DepartmentofState 83
• CleanEnergyFinanceFacilityfortheCaribbeanandCentralAmerica(CEFF-CCA)85
U.S.DepartmentofTransportation 89
• TransportationInfrastructureFinanceandInnovationActProgram 91
U.S.DepartmentoftheTreasury 93
• NewMarketsTaxCredits 95• QualifiedEnergyConservationBonds 97
U.S.EnvironmentalProtectionAgency 99
• CleanWaterStateRevolvingFund 101� CWSRFCaseStudy 103
• DrinkingWaterStateRevolvingFund 105� DWSRFCaseStudy 108
U.S.SmallBusinessAdministration 109
• 7(A)LoanProgram 111• 504LoanProgram 113• SmallBusinessInvestmentCompany 115
� SBACaseStudy 117
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE7
FEDERALFINANCINGPROGRAMSFORCLEANENERGYBYPROGRAMTYPE
FinancingProgramsServingMultipleMarketSegments
• DOE:LoanProgramsOffice(LPO) 13• DOE:TitleXVIIInnovativeCleanEnergyLoanGuaranteeProgram 14• DOE:AdvancedTechnologyVehiclesManufacturing(ATVM)DirectLoanProgram22• USDA:TheRuralUtilitiesService:ElectricLoanProgram 58• USDA:TheRuralUtilitiesService:EnergyEfficiency&ConservationLoanProgram 60• USDA:TheRuralUtilitiesService:HighEnergyCostGrantProgram 61• USDA:TheRuralUtilitiesService:RuralEnergySavingsProgram 63• HUD:Section108LoanGuaranteeProgram 78• TREASURY:NewMarketsTaxCredits 95• TREASURY:QualifiedEnergyConservationBonds 97
SingleFamilyHousing
• HUD:EnergyEfficientMortgageProgram 67• HUD:RehabilitationMortgageAssistance:Section203(k)Loans 76
Multi-FamilyHousing
• USDA:Multi-FamilyHousingEnergyEfficiencyInitiative 43• HUD:FHARiskSharing 69• HUD:MultifamilyHousing 71• HUD:PublicHousingCapitalFund 73• HUD:PublicHousingEnergyPerformanceContracts 75
CommercialBuildings&Facilities
• USDA:EnvironmentalQualityIncentivesProgram 41• USDA:RepoweringAssistanceProgram 46• USDA:RuralDevelopmentBioenergyProgramfor
AdvancedBiofuelsPaymentProgram 48• USDA:RuralDevelopmentBiorefinery,RenewableChemical,and
BiobasedProductManufacturingAssistanceProgram 50• USDA:RuralDevelopmentLoan&GrantAssistance(SeveralPrograms) 52• USDA:RuralEnergyforAmericaProgram 56• SBA:7(A)LoanProgram 111• SBA:504LoanProgram 113
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE8
PublicBuildings&Facilities
• DOE:EnergySavingsPerformanceContractsforFederalBuildings 25
InfrastructureProjects
• DOT:TransportationInfrastructureFinanceandInnovationActProgram 91• EPA:CleanWaterStateRevolvingFund 101• EPA:DrinkingWaterStateRevolvingFund 105
FinanceFacilitiesforManufacturing&SupplyChainCompanies
• SBA:7(A)LoanProgram 111• SBA:504LoanProgram 113• SBA:SmallBusinessInvestmentCompany 115
FinancingProgramsforInternationalProjects
• OPIC:DebtFinancing 29• OPIC:PoliticalRiskInsurance 30• OPIC:SupportForPrivateEquityFunds 31• USAID:DevelopmentCreditAuthority 35• USAID:DevelopmentInnovationVentures 37• STATE:CleanEnergyFinanceFacilityfortheCaribbean&CentralAmerica 85
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE9
• LoanProgramsOffice(LPO)
• LPO:TitleXVIIInnovativeCleanEnergyLoanGuaranteeProgram
� TitleXVIICaseStudy
• LPO:AdvancedTechnologyVehiclesManufacturing(ATVM)DirectLoanProgram
� ATVMCaseStudy
• EnergySavingsPerformanceContractsforFederalBuildings
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESDEPARTMENTOFENERGY
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE11
DOELoanProgramsOffice(LPO)
DESCRIPTION
TheU.S.DepartmentofEnergy’sLoanProgramsOffice(LPO)investsinthepowerofAmericaninnovation.LPOinvestmentsacceleratethedeploymentofinnovativecleanenergyprojectsandadvancedtechnologyvehiclemanufacturingfacilitiesacrosstheUnitedStates.Itsteamoftechnical,financial,environmental,andlegalprofessionalsisdedicatedtoadvancinganenergystrategythatavoids,reduces,orsequestersgreenhousegases.Todate,LPOhassupportedalarge,diverseportfolioofmorethan$30billioninloans,loanguarantees,andcommitmentscoveringmorethan30projectsacrosstheUnitedStates.Together,theseprojectshavegeneratedmorethan$50billionintotalprojectinvestment,supportedjobcreation,cutpollution,andenhancedAmericancompetitivenessintheglobaleconomy.LPOhasmorethan$40billioninremainingloanandloanguaranteeauthoritytofinanceinnovativecleanenergyprojectsandadvancedtechnologyvehiclesmanufacturing.
ELIGIBLEACTIVITIESANDINVESTMENTS
Applicationsarecurrentlybeingacceptedundertwoprograms:
• TitleXVIIInnovativeCleanEnergyLoanGuaranteeProgram• AdvancedTechnologyVehiclesManufacturing(ATVM)DirectLoan
ProgramFORMOREINFORMATION
TitleXVIILoanGuaranteeProgramwww.energy.gov/lpo/title-xviiPhone:202-586-8336Fax:202-586-7366Email:lgprogram@hq.doe.govU.S.DepartmentofEnergyLP101000IndependenceAvenue,SWWashingtonD.C.20585
ATVMDirectLoanProgramwww.energy.gov/lpo/atvmPhone:202-586-8146Fax:202-586-7809Email:atvmloan@hq.doe.govU.S.DepartmentofEnergyLP201000IndependenceAvenue,SWWashingtonD.C.20585
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE13
DOELoanProgramsOfficeTitleXVIIInnovativeCleanEnergyLoanGuaranteeProgram
DESCRIPTION
LPOhasmorethan$24billioninremainingloanauthoritytohelpfinanceinnovativecleanenergyprojects.TheTitleXVIIinnovativecleanenergyprojects(TitleXVII)loanprogramprovidesloanguaranteestoacceleratethedeploymentofinnovativecleanenergytechnology.TheU.S.DepartmentofEnergyisauthorizedtoissueloanguaranteespursuanttoSection1703ofTitleXVIIoftheEnergyPolicyActof2005.Loanguaranteesaremadetoqualifiedprojectsandapplicantswhoapplyforfundinginresponsetoopentechnology-specificsolicitations.TheTitleXVIIloanprogramappliestoawiderangeofenergytechnologies,includingadvancedfossilenergy,nuclearenergy,renewableenergy,andenergyefficiency.
ELIGIBLEACTIVITIESANDINVESTMENTS
TobeeligibleforaTitleXVIIloanguarantee,aprojectmustmeetallofthefollowingrequirements:
• Bean“EligibleProject”asdefinedinanopensolicitationinthetechnologyareadescribedtherein;
• Employ“neworsignificantlyimproved”technologiesascomparedtocommercialtechnologiesinservicesintheUnitedStatesatthetimetheguaranteeisissued;
• Avoid,reduce,orsequestergreenhousegasemissions;• BelocatedintheUnitedStates(foreignownershiporsponsorshipof
theprojectsispermissibleaslongastheprojectsislocatedinoneofthefiftystates,theDistrictofColumbia,oraU.S.territory);and,
• Provideareasonableprospectofrepayment.
Inaddition,anapplicantmustdemonstratethatithassufficientfundstocarryouttheprojectandislimitedfromreceivingcertainotherfederalsupportasmorefullydescribedintheapplicablesolicitation.
LPOiscurrentlyacceptingapplicationsinresponsetothefollowingopenTitleXVIIsolicitations:
1) AdvancedFossilEnergyProjectsSolicitation
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE14
Thissolicitationseeksapplicationsforprojectsthatcoverarangeofadvancedfossiltechnologies.Thesetechnologiescouldincludeanyfossiltechnologythatisneworsignificantlyimproved,ascomparedtomoreestablishedtechnologiesinserviceintheU.S.,andreducesgreenhousegasemissions.Applicantsshouldreviewthefinalsolicitationandallsupplementsbeforesubmittinganapplication.Thesematerialsareavailableonlineat:http://go.usa.gov/cuZCjWhileeligibilitywillultimatelybeevaluatedonaprojectbyprojectbasis,LPOhasidentifiedfourtechnologyareasofinterestunderthissolicitation:
• TechnologyArea1:AdvancedResourceDevelopment
Resourcedevelopmentandextractioncanbeanenergyintensiveprocessandamajorcontributoroflifecyclegreenhousegasemissionsassociatedwithfossilfueluse.Together,theprocessesaccountforroughlyfivepercentoftheUnitedStatesgreenhousegasemissions.Advancesintechnologiesandpracticesassociatedwithdevelopingcoal,naturalgas,andoilresourcesoffertheabilitytoimproveefficienciesandreduceupstreamgreenhousegasemissionsassociatedwithproducinganddeliveringfossilenergytoendusers.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:noveloilandgasdrilling,stimulation,andcompletiontechnologiesthatavoid,reduce,orsequestergreenhousegases;useofassociatedgasproductiontoreduceflaring;coal-bedmethanerecoverytoreducemethaneemissionsintotheatmosphereassociatedwithcoalmining;undergroundcoalgasification;andmethaneemissionscapturefromenergyproduction,transmission,ordistribution.
• TechnologyArea2:CarbonCaptureFossil-basedenergysystemsarepoint-sourcesthatgenerateCO2intheirprocessesandtypicallyemitlargevolumesofCO2intotheatmosphere.Currently,thesefacilitiesaccountforoverhalfoftheUnitedStates’annualgreenhousegasemissions.ThepurposeofcarboncapturetechnologyistoselectivelyremoveCO2fromprocessstreamsandfluegases,andproduceaconcentratedstreamthatcanbecompressedandtransportedtoapermanentstoragesite.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:CO2capturefromsynthesisgasesinfuelreformingorgasificationprocesses;CO2capturefromfluegasesintraditionalcoalornaturalgaselectricitygeneration;andCO2capturefromeffluentstreamsofindustrialprocessingfacilities.
• TechnologyArea3:Low-CarbonPowerSystemsFossil-basedelectricitygenerationtraditionallyinvolvesfuelcombustionwithairasaheatandpowersource,producingafluegaswithlowconcentrationsofCO2,and,therefore,makingtheadoptionofcarboncapturemoredifficult.Novelprocesseshave
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE15
beenproposedthatgeneratefossil-basedelectricitybutdonotrequiretraditionalcarboncapturetechnologyinordertoreduceCO2emissions.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:coalornaturalgasoxycombustion;chemicalloopingprocesses;hydrogenturbines;andsynthesisgas,naturalgas,orhydrogenbasedfuelcells.
• TechnologyArea4:EfficiencyImprovementsIndustrialfossil-basedsystemstypicallyutilizeonlyafractionoftheenergyavailablefromtheirfeedstocksandoftenrejectalargeamountoflowqualityandwasteheatfromtheirprocesses.Technologyimprovementstoincreasetheefficiencyoffossil-basedsystemscanresultinreducedemissions-per-productandbetterfuelutilization.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:combinedheatandpower;wasteheatrecoveryonindustrialfacilities;high-efficiencydistributedfossilpowersystems;andhightemperaturematerialsforfossil-basedsystems.
2) AdvancedNuclearEnergyProjectsSolicitationThissolicitationseeksapplicationsforprojectsthatcoverarangeofadvancednucleartechnologies.Thesetechnologiescouldincludeanynucleargenerationorfront-endtechnologythatreducesgreenhousegasemissionsandisneworsignificantlyimproved,ascomparedtomoreestablishedtechnologiesinserviceintheUnitedStates.Applicantsshouldreviewthefinalsolicitationandallsupplementsbeforesubmittinganapplication.Thesematerialsareavailableonlineat:http://go.usa.gov/cuZCxWhileeligibilitywillultimatelybeevaluatedonaproject-by-projectbasis,LPOhasidentifiedfourkeytechnologyareasofinterestunderthissolicitation:• TechnologyArea1:AdvancedNuclearReactors
Thisareafocusesonnuclearenergyprojectswithstate-of-the-artdesignimprovementsintheareasoffueltechnology,thermalefficiency,modularizedconstruction,safetysystems,andstandardizeddesign.
• TechnologyArea2:SmallModularReactors(SMRs)Thisareafocusesonnuclearenergyprojectswithstate-of-the-artdesignimprovementsintheareasoffueltechnology,thermalefficiency,modularizedconstruction,safetysystems,andstandardizeddesignandarenominally300MWeorsmallerinsize.
• TechnologyArea3:UpratesandUpgradesatExistingFacilitiesThisareafocusesonprojectsconsistingofimprovementsand/ormodificationstoanexistingreactorthatis(1)operatingbutthatduetosuchimprovementsand/ormodificationswilloperatemoreefficientlyand/orwillincreasecapacity;(2)isnotoperating
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE16
andcannotoperatewithoutsuchimprovementsand/ormodificationsor;(3)isoperatingbutwouldberequiredtoceaseoperatingunlesssuchimprovementsand/ormodificationsaremade.
• TechnologyArea4:Front-EndNuclearThisareafocusesonadvancednuclearfacilitiesforthe“front-end”ofthenuclearfuelcycle.Ofthe$12.5billionavailableunderthissolicitation,$2billionisavailableexclusivelyfor“front-end”projects.Thiscouldinclude:
a)UraniumConversion:ProjectsthateconomicallyconvertU3O8powderintoagaseousformofuraniumhexafluoride;b)UraniumEnrichment:ProjectsorfacilitiesthattransformnaturaluraniumoruraniumtailstoahigherisotopiccontentofU235includingby(1)gascentrifugeor(2)laserisotopeseparation;andc)NuclearFuelFabrication:Projectsthatfabricatenuclearfuelincluding(1)productionofUO2powderthatis“reconverted”fromenrichedUF6gasfromenrichmentplants;(2)formationofUO2pelletsfromUO2powderthroughcompactionandsintering;and(3)fuelassembly(i.e.insertionofpelletsintozircaloytubesandformationofafuelassemblyusingfasteners.)
3) RenewableEnergyandEfficientEnergyProjectsSolicitation
Thissolicitationseeksapplicationsforprojectsthatcoverarangeofrenewableenergyandenergyefficienttechnologies.Thesetechnologiescouldincludeanyrenewableenergyorenergyefficiencytechnologythatisneworsignificantlyimproved,ascomparedtomoreestablishedtechnologiesinserviceintheU.S.,andreducesgreenhousegasemissions.Applicantsshouldreviewthefinalsolicitationandallsupplementsbeforesubmittinganapplication.Thesematerialsareavailableonlineat:http://go.usa.gov/cuZaQWhileeligibilitywillultimatelybeevaluatedonaprojectbyprojectbasis,LPOhasidentifiedfivetechnologyareasofinterestunderthissolicitation:• TechnologyArea1:AdvancedGridIntegrationandStorage
Thisareafocusesonrenewableenergysystemsthatmitigateissuesrelatedtovariability,dispatchability,congestion,andcontrolbyincorporatingtechnologiessuchasdemandresponseorlocalstorage.Theseadvancedsystemdesignswilldemonstrategreatergridcompatibilityofgenerationfromrenewableresourcesandopenupanevenlargerroleforrenewablepowergeneration.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:renewableenergygeneration,includingdistributedgeneration,incorporatingstorage;smartgridsystems
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE17
incorporatinganycombinationofdemandresponse,energyefficiency,sensing,andstoragetoenablegreaterpenetrationofrenewablegeneration;microgridprojectsthatreduceCO2emissionsatasystemlevel;andstorageprojectsthatclearlyenablegreateradoptionofrenewablegeneration.
• TechnologyArea2:Drop-inBiofuelsThisareafocusesonbiofuelsthataremorecompatiblewithtoday’sengines,deliveryinfrastructureandrefuelingstationequipment.Theseprojectstakeadvantageofexistinginfrastructurebyprovidingnearlyidenticalbio-basedsubstitutesforcrudeoil,gasoline,dieselfuel,andjetfuel,orproduceintermediatefuelfeedstocksthatcanbedeliveredtoandintegratedintoexistingoilpetroleumrefineries.Thesetypesofprojectswouldnotberestrictedbycurrentethanol/biodieselblendlevelsandcoulddriveacatalyticchangeinthefuelsmarket.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:newbio-refineriesthatproducegasoline,dieselfuel,and/orjetfuel;bio-cruderefiningprocesses;andmodificationstoexistingethanolfacilitiestogasoline,dieselfuel,and/orjetfuel.
• TechnologyArea3:Waste-to-EnergyThisareafocusesonprojectsharnessingwasteproductssuchaslandfillmethaneandsegregatedwasteasasourceofenergyorfuel.Thesetypesofprojectswillenablecommercialscaleutilizationofwastematerialswhichareotherwisediscardedandproducesignificantclean,renewableenergy.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:methanefromlandfillsorranchesviabiodigesterstoheatandpower;cropwastetofueland/orenergyandbioproducts;andforestrywastetofueland/orenergypotentiallyviaandcofiring.
• TechnologyArea4:EnhancementofExistingFacilitiesThisareafocusesonprojectsincorporatingrenewablegenerationtechnologyintoexistingrenewableenergyandefficientenergyfacilitiestosignificantlyenhanceperformanceorextendthelifetimeofthegeneratingasset.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:incorporationofpowerproductionintocurrentlynon-powereddams;inclusionofvariablespeedpump-turbinesintoexistinghydrofacilities;andretrofittingexistingwindturbines.
• TechnologyArea5:EfficiencyImprovementsThisareafocusesonprojectsthatincorporateneworimprovedtechnologiestoincreaseefficiencyandsubstantiallyreducegreenhousegases.DOEanticipatesqualifyingprojectsmayinclude,butarenotlimitedto,thefollowing:improveorreduceenergyusageinresidential,institutional,andcommercialfacilities,buildings,and/orprocesses;recover,store,ordispatch
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE18
energyfromcurtailedorunderutilizedrenewableenergysources;recover,store,ordispatchwasteenergyfromthermal,mechanical,electrical,chemicalorhydro-processes;dispatch,control,orstabilizeintermittentpowertolargetransmissionlines,smartgirds,andmicrogrids.
EligibilityofDistributedEnergyProjectsDistributedEnergyProjectsarecurrentlydrivinginnovationandtransformingU.S.energymarkets.Unlikethelarge,centralizedpowerplantsthatLPOhasfinancedinthepast,DistributedEnergyProjectsarecomprisedofinstallationsoffacilitiesutilizingasingletechnology,oradefinedsuiteoftechnologies,atmultiplesites,deployedpursuanttoamasterbusinessplan.Demonstratingthemarketviabilityofinnovativetechnologiesinareassuchasgridinfrastructureandstorage,energy-efficientbuildingsandinstallations,anddistributedpowergenerationwouldcreateeconomicopportunity,strengthenenergysecurity,andreducegreenhousegasemissions.AswithothertypesofprojectsLPOhasfinanced,DistributedEnergyProjectsusinginnovativetechnologyfacemarketbarriersbecausecommerciallendersareoftenunwillingorunabletotakeontheriskofneworinnovativetechnologyorprojectstructuresuntiltheyhaveastronghistoryofcreditperformanceandcommercialoperation.TitleXVIIoftheEnergyPolicyActof2005addressesthecapitalconstraintsassociatedwithinnovativetechnologiesinordertoacceleratethedomesticdeploymentofsuchinnovativeenergytechnology.ManypotentialDistributedEnergyProjectapplicantsmaybereluctanttosubmitapplicationsunderLPO’ssolicitationsduetouncertaintyregardingaproject’seligibilityoruncertaintyaboutwhetherLPOwillaccepttheapplicant’sproposalforafinancingstructure.LPObelievesthatDistributedEnergyProjectscanbeeligibleprojectsunderitscurrentlyoutstandingsolicitations.However,DistributedEnergyProjectsrequirefinancialstructuresthataredifferentfrommostofthefinancingstructuresthatLPOhasusedinthepastforfinancinglarge,centralizedprojects.LPOsupplementeditsAdvancedFossilEnergyProjectsandRenewableEnergyandEfficientEnergyProjectssolicitationstoclarifythatitwillacceptandconsiderapplicationsforDistributedEnergyProjectsandtoshowhowsuchatransactionmightbestructured.LPOunderstandsthatotherprojectstructuresmayexistorbedeveloped,anditwillconsiderapplicationsforprojectsthatusethosestructures.HowtoApplyforaTitleXVIICleanEnergyProjectLoanGuaranteeTheTitleXVIIapplicationprocessisatwo-partprocess.EligibleapplicantsreceiveaninvitationtosubmitPartIIoftheirapplicationaftermeetingbasiceligibilityrequirementsreferredtoineachsolicitationinPartIoftheapplicationprocess.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE19
FeesLPOisrequiredtocollectseveralfeesfromTitleXVIIloanprogramapplicants.Pleasenotethattheexactamountoffeeswillvarywitheachsolicitation.Toobtainmoredetailedinformationaboutfees,pleaserefertothesolicitations.Inaddition,eachapplicantisresponsibleforpayingthefeesandexpensesincurredbytheDepartment’sindependentconsultantsandoutsidelegalcounselinconnectionwithsuchapplicant’sproject.ApplicationFeeThisfeecoversthecostsassociatedwiththeDepartment’sfinancialandtechnicalreviewstodeterminewhichprojectswillbeselectedforduediligence.The$50,000applicationfeemustbepaidatthetimethePartIapplicationissubmitted.IfaprojectisinvitedtosubmitaPartIIapplication,itmustpaytheremainderoftheapplicationfeewhenitsubmitsthePartIIapplication.Forprojectsrequestingmorethan$150millioninloanguarantees,thePartIIapplicationfeeis$350,000.Forprojectsrequestinglessthan$150millioninloanguarantees,thePartIIapplicationfeeis$100,000.FacilityFeeThefacilityfeecoverstheDepartment’sadministrativecostsincurredinconnectionwithconsideringwhethertoissuealoanguaranteeandtoissuesuchloanguarantee,includingexpensessuchasthoseincurredinconnectionwithduediligence,negotiationanddocumentation.Thisfeeistypicallypaidinpartatconditionalcommitment,withthebalancedueuponissuanceoftheloanguarantee.MaintenanceFeeTheannualmaintenancefeecoverstheDepartment’sadministrativeexpenses,otherthanextraordinaryexpenses,inservicingandmonitoringtheloanguaranteeduringtheliftoftheloan.Thefeeispaideachyearinadvance,commencingwithpaymentofapro-ratedannualpaymentontheclosingdateoftheloanguarantee.CreditSubsidyCostThecreditsubsidycostisthenetpresentvalueoftheestimatedlong-termcosttotheU.S.governmentofaloanguaranteeasdeterminedundertheapplicableprovisionsoftheFederalCreditReformActof1990,asamended(FCRA).Section1702(b)ofTitleXVIIprovidesthatnoguaranteeshallbemadeunless:
(1)Anappropriationforthecostoftheguaranteehasbeenmade,(2)TheSecretaryhasreceivedfromtheapplicantapaymentinfullforthecostoftheguaranteeanddepositedthepaymentintotheTreasury,or(3)Acombinationofoneormoreappropriationsunder(1)andoneormorepaymentsfromtheapplicantunder(2)hasbeenmadethatissufficienttocoverthecostoftheguarantee.
FORMOREINFORMATION
MoreinformationaboutTitleXVII,opensolicitationsandtheapplicationprocesscanbefoundonlineat:www.energy.gov/lpo/title-xviiApplyonlineat:https://apply.loanprograms.energy.gov
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE20
DOELoanProgramsOfficeTitleXVIICaseStudy
TITLEXVIICASESTUDY:DesertSunlight
LPOhasprovidedfinancingfornumerousaward-winningcleanenergyprojects,includingDesertSunlight,a550-megawatt(MW)photovoltaic(PV)solarpowerplantlocatedinRiversideCounty,California,thatwasissuedpartialloanguaranteestotaling$1.5billion.LPOwascreatedbyCongresstoprovidefinancingforearlydeploymentsofcommercial-scale,innovative,cleanenergyprojectsbecausecommerciallendersareoftenunwillingtofullyfinancesuchprojects.Tobridgethisfinancinggap,LPOprovidedloanguaranteesforthefirstfivephotovoltaic(PV)solarprojectslargerthan100MWthatallowedprojectstobefinancedexclusivelythroughtheU.S.Treasury’sFederalFinancingBank.ForDesertSunlight,LPOworkedwithagroupof14commercialfinancialinstitutionsthroughtheFinancialInstitutionPartnershipProgram(FIPP)tojointlyfinancetheproject.Asrequiredbylaw,LPOstoppedissuingnewloanguaranteesundertheSection1705ProgramonSeptember30,2011,butisstillacceptingapplicationsundertheSection1703Program.However,theinitialinvestmentsmadebyLPOhelpedbuildamarketthatsubsequentlyfinancedatleast28additionalprojectslargerthan100MWwithouthelpfromtheDepartment.ManywerefinancedbythebanksthatgainedvaluableexperienceworkingwithLPOonDesertSunlight.Formoreinformation,see:www.energy.gov/lpo/desert-sunlight
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE21
DOELoanProgramsOfficeAdvancedTechnologyVehiclesManufacturing(ATVM)DirectLoanProgram
DESCRIPTION
TheATVMloanprogramhasmorethanapproximately$16billionavailableforloanstosupportthemanufactureofadvancedtechnologyvehiclesandqualifyingcomponents.Inorderforavehicletobeanadvancedtechnologyvehicle,thevehiclemustbea“light-duty”passengervehiclethatsatisfiesspecifiedemissionandfueleconomystandards,orisan“ultra-efficient”vehicle.Tobeaqualifyingcomponent,thecomponentmustbedesignedandinstalledforthepurposeofmeetingtheperformancerequirementsforanadvancedtechnologyvehicle.TheATVMdirectloanprogramwasestablishedinSection136oftheEnergyIndependenceandSecurityActof2007.
ELIGIBLEACTIVITIESANDINVESTMENTS
TobeeligibleforanATVMdirectloananapplicantmust:
• Beanautomotivemanufacturersatisfyingspecifiedfueleconomyrequirementsoramanufacturerofqualifyingcomponents.
• Befinanciallyviablewithoutthereceiptofadditionalfederalfundingfortheproposedproject.
TheproceedsofanATVMdirectloanmayonlybeusedtopayforATVMeligiblecostsaftersubstantialcompletionofanapplicationhasbeendetermined.ATVMeligiblecostsare:
• Coststhatarereasonablyrelatedtoreequipping,expanding,orestablishingmanufacturingfacilitiesintheUnitedStatestoproduceadvancedtechnologyvehiclesorqualifyingcomponents;and
• CostsofengineeringintegrationperformedintheUnitedStatesofadvancedtechnologyvehiclesorqualifyingcomponents.
EligibleprojectsmustbelocatedintheUnitedStates,buttheATVMprogramisopentobothforeignanddomesticmanufacturers.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE22
InterestedapplicantsshouldreviewtheATVMeligibilityrequirementsandtheUpdatedGuidanceforApplicantstotheAdvancedTechnologyVehiclesManufacturingLoanProgram.PotentialapplicantsarealsoencouragedtoreviewtheATVMOverviewpresentationtolearnmoreaboutATVMdirectloansandtheapplicationprocess.Potentialapplicantsmay,butarenotrequiredto,consultATVMloanprogramstaffbyteleconferenceorinpersontodiscusspotentialapplicationspriortosubmission.HowtoApplySubstantiallycompleteapplicationmeetingallapplicableeligibilityrequirements.NopaymentoffeestotheDepartmentofEnergyisrequiredtoapplyforanATVMdirectloan;however,applicantsarerequiredtopaya0.1percentclosingfeeupto$100,000totheDepartmentontheclosingdateofanATVMdirectloan.
FORMOREINFORMATION
Moreinformationcanbefoundonlineat:www.energy.gov/lpo/atvmToscheduleaconsultation,pleaseemailtheATVMprogramofficeatatvmloan@hq.doe.govApplyonlineathttps://apply.loanprograms.energy.gov
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE23
DOELoanProgramsOfficeATVMCaseStudy
ATVMCASESTUDY:Ford
InSeptember2009,theDepartmentofEnergyissueda$5.9billionloantotheFordMotorCompanytoupgrade13facilitiesinIllinois,Kentucky,Michigan,Missouri,NewYork,andOhio.Theresultingstate-of-the-artassemblyandmanufacturingplantshavetheenhancedflexibilityofproducingmultiple-platform,fuel-efficientadvancedtechnologyvehiclesinresponsetochangingmarketdemandsandfuelefficiencystandards.Fordupdatedseveralfactoriestocontinueimprovingfuelefficiencyinmorethanadozenpopularvehicles,includingtheEscape,Fiesta,Focus,Fusion,andTauruscarmodels,aswellastheF-150light-dutytruck.TheinnovationsincludethefamilyofFordEcoBoost™engines,whichareavailableinalmostallmodels,andintroductionsofnewhybrid,plug-inhybrid,andall-electricplug-invehicles.2015markedthefirsttimeFordhadsurpassedmorethan1millioninvehiclessoldwiththeEcoBoost™.Formoreinformation,see:www.energy.gov/lpo/ford
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE24
DOEEnergySavingsPerformanceContractsforFederalBuildings
DESCRIPTION
EnergySavingsPerformanceContracts(ESPCs)areaninnovativefinancingtechniquethatusecostsavingsfromreducedenergyconsumptiontorepaythecostofinstallingenergyconservationmeasures.NormallyofferedbyEnergyServiceCompanies(ESCOs),thisfinancingtechniqueallowsfederalbuildingstoachieveenergysavingswithoutrequiringup-frontcapitalexpenses.ThecostsoftheenergyimprovementsarebornebytheESCOandpaidbackoutofguaranteedenergysavings.Otheradvantagesincludetheabilitytouseasinglecontractortodonecessaryenergyauditsandretrofitandtoguaranteetheenergysavingsfromaselectedseriesofconservationmeasures.ESPCsforfederalbuildingscancreatelocaljobsanddriveworkforAmericanmanufacturersandtheirworkforces.
ELIGIBLEACTIVITIESANDINVESTMENTS
Installationofenergyconservationmeasuresonfederalbuildingsandfederalfacilitiesareeligible.
FORMOREINFORMATION
MoreinformationaboutESPCsforfederalbuildingsmaybefoundonlineat:http://www1.eere.energy.gov/femp/about/about.htmlProgramContactSchuyler“Skye”SchellU.S.DepartmentofEnergyPhone:(202)596-9015Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE25
• DebtFinancing
• PoliticalRiskInsurance
• SupportForPrivateEquityFunds
� OPICCaseStudy
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
OVERSEASPRIVATEINVESTMENTCORPORATION
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE27
OPICDebtFinancing
DESCRIPTION
OPICoffersdirectloansandguaranteesofupto$250millionfortenorsaslongas20yearswithspecificprogramstargetingsmallandmediumU.S.businesses.Bycomplementingtheprivatesector,OPICcanprovidefinancingincountrieswhereconventionalfinancialinstitutionsoftenarereluctantorunabletolend.
ELIGIBLEACTIVITIESANDINVESTMENTS
OPICmaintainsachecklisttohelpprojectsponsorsdeterminewhethertheyareeligibleforOPICfinancialproductsat:https://www.opic.gov/what-we-offer/financial-products/eligibility
FORMOREINFORMATION
ProgramContactNadiaRhaziProgramManager;[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE29
OPICPoliticalRiskInsurance
DESCRIPTION
OPICofferscoverageofupto$250millionagainstlossesduetocurrencyinconvertibility,expropriation,regulatoryrisk,politicalviolence,andbreachofcontract.Thepoliticalriskinsurancealsooffersreinsurancecapabilities.
ELIGIBLEACTIVITIESANDINVESTMENTS
PoliticalriskinsuranceisavailabletoU.S.investors,lenders,contractors,exporters,andNGOsforinvestmentsin150developingcountries,includinghigh-riskcountriessuchastheDemocraticRepublicofCongo,Iraq,Afghanistan,andPakistan.Coverageisofferedforsmallandlargeinvestmentsthatprovidepositivedevelopmentalbenefits.
FORMOREINFORMATION
ProgramContactRuthAnnNicastriManagingDirector,PoliticalRiskInsuranceStructuredFinanceandInsuranceDepartmentRuthAnn.Nicastri@opic.gov
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE30
OPICSupportForPrivateEquityFunds
DESCRIPTION
OPICoffersdebtfinancingforemergingmarketprivateequityfundsselectedthroughanopenandcompetitiveprocess.
ELIGIBLEACTIVITIESANDINVESTMENTS
OPICinitiatesthefundmanagerselectionprocessonlythroughthepublicationofacallforproposals(the“Call”)inprivateequitytradejournalsandonOPIC’swebsite.Then,aselectioncommittee,comprisedofaninternalOPICteamandanindependentprivateequityconsultant,conductsextensivemanagerevaluations.Allapplicationsthatmeetthepublishedselectioncriteriawillbeconsidered.Generally,theevaluationofprospectivefundmanagersisbasedonthefollowingcriteria:
• Theviabilityandthoughtfulnessoftheproposal;• Therelevanttrackrecordoftheprospectivemanagementteam;• Thecohesivenessofthemanagementteam,anditsexperience
managingthird-partycapital;and,• Theabilityofthemanagertoraisesufficientequitycapitaltosupport
theinvestmentthesis.FORMOREINFORMATION
ProgramContactWilliamPearceManagingDirector,[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE31
OPICCaseStudy
OPICCASESTUDY:CaribbeanEnergySecurityInitiative
FortheCaribbean,energysecurityisamajorchallenge.Theregionislargelydependentonimportedfuelforelectricitygeneration,whichdivertsresourcesawayfromeconomicdevelopment.Since2014,whentheU.S.launchedtheCaribbeanEnergySecurityInitiative(CESI),OPIChasbeenoneoftheU.S.agencieshelpingtotransformtheregion’selectricitysector.OPICisdedicatingresourcestofinanceprojectsthatwillintroducemorehome-grownrenewableenergyandsustainablecleantechnologies.Jamaicahasbeenoneoftheregionalleadersintransitioningtocleanersourcesofelectricitygeneration,andOPICdebtfinancingandinsurancehaveplayedapartinhelpingJamaicaachievethatgoal.Specifically,OPICisprovidingsupporttoa20MWsolarfacility,whichwillbeoneofthelargestsolarplantsintheCaribbean.Inaddition,OPICissupportinga36MWwindfarm,whichwillbeJamaica’slargestprivatesectorrenewableenergyproject.Thesefacilitiesalonewillaccountforaboutsevenpercentofthecountry’sgeneratingcapacity.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE32
• DevelopmentCreditAuthority
• DevelopmentInnovationVentures
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESAGENCYFORINTERNATIONALDEVELOPMENT
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE33
USAIDDevelopmentCreditAuthority
DESCRIPTION
USAIDprovidesforeignassistancetosupportshareddevelopmentobjectives.USAIDimplementsDevelopmentCreditAuthority(DCA)guarantees.DCApartialcreditguaranteeisdesignedto:
• Reduceriskstogenerateadditionallendingtounderservedmarketsandsectors;and
• Demonstratethelong-termcommercialviabilityoflendingindevelopingmarkets.
TheDCAportfoliofrom1999through2015hassupportedmorethan$4.2billionincreditmadeavailablein74countries.
ELIGIBLEACTIVITIESANDINVESTMENTS
GeneralFeaturesInclude:
• GuaranteebackedbythefullfaithandcreditoftheU.S.Treasury• Typicallya50percentparipassuguaranteeonloanprincipal(notfees
orinterest)• Sharerecoveriespro-ratawithUSAIDnetofreasonabledocumented
expensesactuallyincurred• Guaranteeofnon-sovereigndebtcapital• Guaranteeondisbursements,typicallyusedfortermloans• Flexibilitytoguaranteelocaland/orforeigncurrency• Guaranteeloanmaturitiesofupto20years• LoansregisteredonlineinasimpleInternet-basedCreditManagement
System• Pre-approvalnotrequiredforindividualloansplacedunderloan
portfolioguarantees• GuaranteesmaybepairedwithUSAIDorothertechnicalassistance
projectsthatcan:
o Strengthentheborrower’sabilitytorepayo Supportthefinancialinstitution’slendingcapacityinanewsector
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE35
StandardTermsInclude:
• Guaranteeofrealizedlosses,requiringthefollowingclaimprocedures:o Wait90daysafterthefinalletterofdemandissenttothe
borrowero Certifythatreasonablecollectioneffortshavebeenpursuedo Writeofftheloanortakeaminimum20percentprovisionifa
legalimpedimentexiststowritingofftheloan
• Feestoachievedevelopmentimpact:o Originationfee:Aone-time,up-frontfeebasedonthefacilitysizeo Utilizationfee:Asemi-annualfeebasedonthevalueofloans
placedundertheguarantee
StandardDCAguaranteeproductsinclude:
• LoanGuarantee• LoanPortfolioGuarantee• PortableGuarantee• BondGuarantee
FORMOREINFORMATION
ProgramContactAndrewGisselquistUSAIDDevelopmentCreditAuthority202-712-5910www.usaid.gov/dca
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE36
USAIDDevelopmentInnovationVentures
DESCRIPTION
DevelopmentInnovationVentures(DIV)isanopencompetitionsupportingbreakthroughsolutionstodevelopmentchallengesaroundtheworld.USAIDlooksforinterventionsthatcouldchangemillionsoflivesatafractionoftheusualcost.
ELIGIBLEACTIVITIESANDINVESTMENTS
HowDIVWorks:
• ThepowerofopeninnovationUSAIDbelievesthattransformativedevelopmentsolutionscancomefromanyone,anywhereintheworld,soweholdayear-round,opencallforideas.DIVsupportsinterventionsinanysectorandinnearlyanycountry.
• HarnessingyourideasThecompetitionisopenyear-round.ApplywithyourideasbysubmittingashortLetterofInterestsummarizingyoursolution.IftheproposalmeetsourselectioncriteriaandtheDIVpillarsofcost-effectiveness,evidence,andscale,wewillaskyoutosubmitaFullApplicationforfinalselection.
• WhatcanbedonetogetherUSAIDawardsgrantfinancingtowinnersinthreedistinctstagesoffinancing.Fundingrangesfromunder$100,000to$15million,andisbasedonwhereaprojectisinitsdevelopmentandtowhatextentyouhavepreviouslygatheredevidenceofsuccess.Thegoalistoworktogetherinordertomaximizeimpacts,lowercosts,andbringsuccessfulsolutionstoscale.
Criteria:
• Cost-EffectivenessDIVseekssolutionswiththepotentialtodelivermoreimpactsperdollarthantraditionalalternatives.
• RigorousTestingDIVemphasizesassessmentofsocialimpactstoevaluatewhatisworking,ortofindoutwhatisnot.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE37
• PathwaystoScaleDIVexpectssolutionstogrowviatheprivateorpublicsectorwithoutlong-termDIVsupport
TheDIVportfolioincludesmorethaninvestmentsmadetodate,toawardeesinorganizationsincludingNGOs,academicinstitutions,andcompaniesandsocialenterprises.Sectorssupportedtodateinclude:
• DemocracyandGovernance• EconomicGrowthandTrade• Energy• GlobalHealth• AgricultureandFoodSecurity• EducationandTraining• Environment• Water,Sanitation,andHygiene
FORMOREINFORMATION
www.usaid.gov/div
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE38
• EnvironmentalQualityIncentivesProgram• Multi-FamilyHousingEnergyEfficiencyInitiative• RepoweringAssistanceProgram• RuralDevelopmentBioenergyProgramforAdvanced
BiofuelsPaymentProgram• RuralDevelopmentBiorefinery,RenewableChemical,
andBiobasedProductManufacturingAssistanceProgram
• RuralDevelopmentLoan&GrantAssistance(SeveralPrograms)
• RuralEnergyforAmericaProgram• TheRuralUtilitiesService:ElectricLoanProgram• TheRuralUtilitiesService:EnergyEfficiency&
ConservationLoanProgram• TheRuralUtilitiesService:HighEnergyCostGrant
Program• TheRuralUtilitiesService:RuralEnergySavings
Program� AdditionalUSDALocalImplementation
Information
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESDEPARTMENTOFAGRICULTURE
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE39
USDAEnvironmentalQualityIncentivesProgram
DESCRIPTION
TheNaturalResourcesConservationService(NRCS)providesdirectfinancialassistancepaymentsthroughtheEnvironmentalQualityIncentivesProgram(EQIP)toagriculturalproducersforinstallationofconservationpracticesthatresultindefinedenvironmentalbenefits.EQIPalsoincludestechnicalassistancetohelpproducerswithdetailedplanning,design,andinstallationoversightforapprovedconservationpractices.
ELIGIBLEACTIVITIESANDINVESTMENTSFinancialassistantpaymentsareavailablethroughEQIPcontractstoaddressenergyefficiencyfor:
• Farm-specificanalysisofenergyconsumption,whichisrequiredasabaselineforrecommendationsofenergyefficiencypractices.Thisanalysis,alsoknownasanenergyaudit,maybedevelopedwithoutEQIPassistance,butmustmeettheAmericanNationalStandardsInstitute(ANSI)/AmericanSocietyofAgriculturalandBiologicalEngineers(ASABE)standardforType2energyauditsasabasisforEQIPfinancialassistanceforimplementationofrecommendationsintheenergyaudit;
• Recommendationsmadeinqualifyingenergyauditsforpracticesthat
haveapotentialtodecreasefuelconsumptionorpurchasedelectricitybyinstallingimprovementstobuildingheating,cooling,andventilationsystems,andbyreplacingequipmentsuchasmotors,pumps,orlightingtoimproveefficiency;and,
• Improvementsofcontrolofsystemsusingtimers,sensors,andvariablespeeddrivesasrecommendedinaqualifiedenergyaudit.
NRCSacceptsandprocessesEQIPapplicationsonacontinuousbasis;however,eachstatemayestablishdeadlinesforoneormoreapplicationperiodsinwhichtoconsidereligibleapplicationsforfunding.Producersmustsubmitacompleteprogramapplication,establishfarmrecords,andotherdocumentationtosupporteligibilitytobeconsideredforfinancialassistancethroughEQIP.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE41
FORMOREINFORMATIONInformationcanbefoundonlineat:http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/financial/eqipforEQIP,andhttp://www.nrcs.usda.gov/wps/portal/nrcs/detail/national/programs/financial/eqip/?cid=stelprdb1046252fortheEQIPNationalOn-FarmEnergyInitiative.MoreisassistanceisavailableforindividualsfromNRCSFieldOfficesthroughoutthecountry.TolocatethenearestNRCSoffice,seetheUSDALocalServiceCentersDirectoryat:http://www.nrcs.usda.gov/wps/portal/nrcs/main/national/contact/localProgramContactMarkA.RoseDirector,FAPDUSDANRCSPhone:202-720-1844Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE42
USDAMulti-FamilyHousingEnergyEfficiencyInitiative
DESCRIPTION
TheMulti-FamilyHousingEnergyEfficiencyInitiativeenablesSection515RuralRentalHousingProgramforNewConstruction,Section514FarmLaborHousingLoansandSection516FarmLaborHousingGrantsforOff-FarmHousing,Section522HousingPreservationGrants,andSections514,515and516Multi-FamilyHousingRevitalizationDemonstrationProgramapplicantstohelptheenvironmentandincreasetheireligibilityforfundingbyincorporatingenergyefficiencypracticesintoprojectdesigns,construction,andoperations.ThegoaloftheMulti-FamilyHousingEnergyEfficiencyInitiativeistopromotedevelopmentprojectsthatrequireareducedquantityofenergytooperate,useenergysourcesthatdonotproducegreenhousegasesandthathavelittleornonetemissionofgreenhousegases,andareeconomicallyviable.Pointsareavailabletoapplicantswhoseekthird-partyenergyefficiencycertifications,useenergyefficientbuildingmaterialsanddesignstrategies,generateenergyonsite,andmakeacommitmenttoenergyefficientpost-constructionoperationandmaintenance.
ELIGIBLEACTIVITIESANDINVESTMENTSThethreeareasoffocusfortheEnergyEfficiencyInitiativeareenergyconservation,energygeneration,andgreenpropertymanagement.Note:PleaseseethemostcurrentNoticeofFundsAvailability(NOFA)foradetailedreviewofapplicationandprojectrequirements.EnergyConservationForenergyconservation,theMulti-FamilyHousingEnergyEfficiencyInitiativeawardspointsforbothnewconstructionandrehabilitationprojectstoparticipateinenergyefficiencyprogramsandstandardscertifications.Thougheachoftheprogramslistedbelowisdifferent,somesharecommonfeatures,whichmaymakeiteasiertoobtainmultiplecertifications.Pointsareawardedforeachcertificationobtained,althoughnotallcertificationsareacceptedbyallUSDA-RDprograms.Participationinqualifiedlocalandregionalprogramsandcertificationsmayalsoearnpoints.Itisimportanttonotethatcertainprogramshavemultiplelevelsofcertificationandthatadditionalpointsareawardedforreachinghigherlevels.Thefollowingarethecurrentavailablecertificationprogramsforenergyconservation:
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE43
• TheEnvironmentalProtectionAgency'sEnergyStarforHomes
program;• TheEnterpriseCommunityPartners'GreenCommunitiesprogram;• TheUnitedStatesGreenBuildingCouncil'sLEEDforHomesprogram;• HomeInnovation's-NationalGreenBuildingStandard™;and,• DepartmentofEnergy'sZeroEnergyReadyHomeprogram.
Note:PleaseseetheindividualUSDA-RDprogramNOFAsfordetailsonwhichcertificationsarepermissibleforyourproject.EnergyGenerationInadditiontoparticipatinginstandardscertificationsandenergyefficiencyprograms,theMulti-FamilyHousingEnergyEfficiencyInitiativeencouragesdeveloperstogenerateenergyon-sitebyutilizingtechnologytolessentheirproperties'needforoutsideenergysources.DoingsowillearnadditionalNOFApointsandincreaseaproject'sviabilityregardingUSDA-RDprogramfunding.Energygenerationcanbeaccomplishedusingtechnologiesincluding,butnotlimitedto:windturbines,micro-turbines,micro-hydropower,photovolactics(capableofproducingavoltagewhenexposedtoradiantenergy,especiallylight),solarhotwatersystems,biomass/biofuelsystemsthatdonotusefossilfuelsinproduction,andgeo-exchangesystems.Developersmustuseindustryrecognizedsimulationsoftwarewhenestimatingenergyconsumptionandgenerationforpreliminarybuildingdesigns.TheymustalsothensubmitareportoffindingsbasedonthesimulationswiththeirUSDA-RDprogramapplications.USDA-RDrecognizesthatzero-netenergyconsumptionisachallengetodevelopersandbuildersalikeandnotallapplicantswillreachthisgoal.Projectswillreceivepointsforpartialenergygenerationoftenpercentormore.Pointsreceivedmayincreasewithhigherpercentagesofenergygeneration,wheregenerationisconsideredtobethetotalamountofenergyneededon-sitetomakethebuildingazero-netenergyconsumerofenergy.Inotherwords,thebuildingrequiresnomoreenergythanitproduces.In2014,pointswereaddedforachievingasmallpercentageofoff-gridenergygenerationaswell.GreenPropertyManagementUSDA-RDbelievesitisimportanttofocusonenergyefficiencyevenafterconstructioniscomplete.Responsiblepost-constructionoperationandmaintenanceisadutyforeveryenvironmentallysoundproperty.Forthisreason,allapplicationswillreceiveadditionalpointsifthedesignatedpropertymanagementcompanyorindividualsthatwillassumeoperationsandmaintenanceobligationshaveaCredentialforGreenPropertyManagement.Credentialingcanbeobtainedfromanyofthefollowingorganizations:
• NationalApartmentAssociation(NAA);• NationalAffordableHousingManagementAssociation;• TheInstituteforRealEstateManagement;and,• USGreenBuildingCouncil'sLeadershipinEnergyandEnvironmental
DesignforOperationsandMaintenance(LEEDOM).
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE44
TheCredentialforGreenPropertyManagementcanbeobtainedfromotherorganizationswithcertifiablecredentialingprograms.Tobeconsidered,allcredentialsmustbeillustratedintheapplicationintheresumes/biographiesofthepropertymanagementteam.
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rd.usda.gov/programs-services/all-programsProgramContactMeghanWalsh,ArchitectUSDARuralHousingServicePhone:(202)205-0903Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE45
USDARepoweringAssistanceProgram
DESCRIPTION
Thisprogramprovidespaymentstoeligiblebiorefineriestoencouragetheuseofrenewablebiomassasareplacementfuelsourceforfossilfuelsusedtoprovideprocessheatorpowerintheoperationofeligiblebiorefineries.
ELIGIBLEACTIVITIESANDINVESTMENTSThepurposeofthisprogramistoprovidefinancialincentivestobiorefineriesinexistenceonJune18,2008,thedateoftheenactmentoftheFood,Conservation,andEnergyActof2008(the2008FarmBill)(Pub.L.110-246),toreplacetheuseoffossilfuelsusedtoproduceheatorpowerattheirfacilitiesbyinstallingnewsystemsthatuserenewablebiomass,ortoproducenewenergyfromrenewablebiomass.Theprogramencouragestheuseofrenewablebiomassasareplacementfuelsourceforfossilfuelsusedtoprovideprocessheatorpowerintheoperationofeligiblebiorefineries.Theamountofassistanceisdeterminedbytheavailabilityoffunds,theprojectscope,andtheabilityoftheproposedprojecttomeetallthescoringcriteria.Inparticular,thepercentagereductioninfossilfuelusedbythebiorefinery,thequantityoffossilfuelsreplacedbyarenewablebiomasssystem,andthecosteffectivenessoftherenewablebiomasssystemdeterminestheamountofassistance.Paymentsaremadeforeligiblepost-applicationcostsincurredduringtheconstructionphaseoftherepoweringproject.EligiblebiorefineriesarethosethatwereinexistencepriortoJune18,2008.Biorefineriesmustinstallnewsystemsthatuserenewablebiomasstoproduceheatandpowerforplantoperationsandreplacetheuseoffossilfuels.Tobeeligibletoreceiveapaymentunderthissection,abiorefineryshalldemonstratethattherenewablebiomasssystemofthebiorefineryisfeasiblebasedonanindependentfeasibilitystudythattakesintoaccounttheeconomic,technical,andenvironmentalaspectsofthesystem.
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rd.usda.gov/programs-services/repowering-assistance-program
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE46
YoumayalsocontactyourstateRuralEnergyCoordinator:http://www.rd.usda.gov/files/RBS_StateEnergyCoordinators.pdfProgramContactMarkBrodziski,Director,EnergyDivisionUSDARuralDevelopmentPhone:(202)205-0903Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE47
USDARuralDevelopmentBioenergyProgramforAdvancedBiofuelsPaymentProgram
DESCRIPTION
TheAdvancedBiofuelPaymentProgramprovidespaymentstoproducerstosupportandexpandproductionofadvancedbiofuelsrefinedfromsourcesotherthancornkernelstarch.Theprogramsupportsandhelpstoensuretheexpandingproductionofadvancedbiofuelsbyprovidingpaymentstoeligibleadvancedbiofuelproducers.Additionalincentivepaymentsmaybemadetocertainproducerswhohaveincreasedtheirbiofueloutputoverthepreviousyear’sproduction.Advancedbiofuelsareproducedfromrenewablebiomasscropssuchascellulose,sugarandstarch(otherthanethanolderivedfromcornkernelstarch),hemicelluloses,lignin,wastematerials,biogas,butanol,diesel-equivalentfuel,sugarcane,andnonfoodcropssuchaspoplartreesorswitchgrass.Assistancepaymentsaredeterminedbythenumberofeligibleparticipantsandtheamountofprogramfundingtobedistributedamongapoolofadvancedbiofuelproducers(eligibleparticipants)foragivenperiodoftime.
ELIGIBLEACTIVITIESANDINVESTMENTSTobeeligiblefortheAdvancedBiofuelPaymentProgram,anapplicantmustproduceandsellanadvancedbiofuel.Conditionsneedtobemetfortheproducerandthebiofuel.AnAdvancedBiofuelProducerisanindividual,corporation,company,foundation,association,labororganization,firm,partnership,society,jointstockcompany,groupoforganizations,ornon-profitentitythatproducesandsellsanadvancedbiofuel.Advancedbiofuelisafuelderivedfromrenewablebiomass,otherthancornkernelstarch.Anadvancedbiofuelproductmustmeeteachofthefollowingconditionstoqualifyforthisprogram:mustmeetthedefinitionofadvancedbiofuelandbeproducedintheUnitedStates;mustbeasolid,liquid,orgas;mustbeafinalproduct;andmustbesoldasanadvancedbiofuelthroughanarm’slengthtransactiontoathirdparty.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE48
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rd.usda.gov/programs-services/advanced-biofuel-payment-programYoumayalsocontactyourstateRuralEnergyCoordinator:http://www.rd.usda.gov/files/RBS_StateEnergyCoordinators.pdfProgramContactMarkBrodziski,Director,EnergyDivisionUSDARuralDevelopmentPhone:(202)205-0903Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE49
USDARuralDevelopmentBiorefinery,RenewableChemical,andBiobasedProductManufacturingAssistanceProgram
DESCRIPTION
TheBiorefinery,RenewableChemical,andBiobasedProductManufacturingAssistanceProgramwasestablishedtoassistinthedevelopmentofnewandemergingtechnologiesforthedevelopmentofadvancedbiofuels.The2014FarmBillexpandedtheprogramtoincluderenewablechemicalandbiobasedproductmanufacturing.Theprogramprovidesloanguaranteesupto$250millionforthedevelopment,construction,andretrofittingofcommercial-scalebiorefineriesandbiobasedproductmanufacturingfacilities.
ELIGIBLEACTIVITIESANDINVESTMENTSEligibleprojectsmustmeetthefollowingcriteria:
• Theprojectmustbeforthedevelopmentandconstructionofcommercial-scalebiorefineriesusingeligibletechnologyorretrofittingofexistingfacilitieswitheligibletechnologyorthedevelopment,construction,andretrofittingoftechnologicallynewcommercial-scaleprocessingandmanufacturingequipmentandrequiredfacilitiesthatwillbeusedtoconvertrenewablechemicalsandotherbiobasedoutputsofbiorefineriesintoend-userproductsonacommercialscale;
• Biorefineryprojectsmustuseaneligiblefeedstockfortheproductionofadvancedbiofuels,renewablechemical,orbiobasedproducts(examplesofeligiblefeedstocksinclude,butarenotlimitedto,renewablebiomass,andbiosolids);
• Theprojectmustprovidecashfundsofnotlessthan20percentofeligibleprojectcosts;and,
• Refinancing,undercertaincircumstances,maybeeligible.
ApplicationsApplicationsmustbesubmittedthroughagency-approvedlendersandconformtotheapplicationrequirementspublishedintheannualNotificationofFundingAvailability.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE50
FORMOREINFORMATIONhttp://www.rd.usda.gov/programs-services/biorefinery-renewable-chemicaland-biobased-product-manufacturing-assistanceProgramContactMarkBrodziski,Director,EnergyDivisionUSDARuralDevelopmentPhone:(202)205-0903Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE51
USDARuralDevelopmentLoan&GrantAssistance(SeveralPrograms)
DESCRIPTION
Programassistanceisprovidedinmanyways,includingdirectorguaranteedloans,grantsandtechnicalassistance.BusinessLoanAssistance:
BusinessandIndustryLoanGuarantee(B&I)ProgramThepurposeoftheB&IGuaranteedLoanProgramistoimprove,develop,orfinancebusiness,industry,andemploymentandimprovetheeconomicandenvironmentalclimateinruralcommunities.Thispurposeisachievedbybolsteringtheexistingprivatecreditstructurethroughtheguaranteeofqualityloanswhichwillprovidelastingcommunitybenefits.Itisnotintendedthattheguaranteeauthoritywillbeusedformarginalorsubstandardloansorforreliefoflendershavingsuchloans.Loanpurposesmustbeconsistentwiththegeneralpurposecontainedintheregulation.Theyincludebutarenotlimitedtothefollowing:businessandindustrialacquisitionswhentheloanwillkeepthebusinessfromclosing,preventthelossofemploymentopportunities,orprovideexpandedjobopportunities;businessconversion,enlargement,repair,modernization,ordevelopment;purchaseanddevelopmentofland,easements,rights-of-way,buildings,orfacilities;andpurchaseofequipment,leaseholdimprovements,machinery,supplies,orinventory.Eligibleactivitiescanbeawardedupto$25million.B&IloanguaranteesmaybecombinedwithRuralEnergyforAmericaProgramloanguarantees(seepage56).SBAloanguarantees7(a)and504mayalsobecombinedwithB&IandREAPloanguarantees.
HousingandCommunityFacilitiesLoanAssistance:
RuralHousingGuaranteedLoanApplicantsforRuralHousingGuaranteedLoansmayhaveanincomeofupto115percentofthemedianincomeforthearea.Familiesmustbewithoutadequatehousing,butbeabletoaffordthemortgagepayments,includingtaxesandinsurance.Inaddition,applicantsmusthavereasonablecredithistories.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE52
RuralHousingDirectLoanSection502RuralHousingDirectLoansareprimarilyusedtohelplow-incomeindividualsorhouseholdspurchasehomesinruralareas.Fundscanbeusedtobuild,repair,renovateorrelocateahome,ortopurchaseandpreparesites,includingprovidingwaterandsewagefacilities.SingleFamilyHousingSection502DirectLoansofferanincentivetoborrowersoftwopointsonfrontandbackendloanqualificationratiosforcompliancewithanyofthefivenationallyrecognizedmeasurementandverificationsystemsofgreen,energy-efficienthomes:
• TheEnvironmentalProtectionAgency'sEnergyStarforHomesprogram;
• TheEnterpriseCommunityPartners'GreenCommunitiesprogram;
• TheUnitedStatesGreenBuildingCouncil'sLEEDforHomesprogram;
• HomeInnovation's-NationalGreenBuildingStandard™;and,• DepartmentofEnergy'sZeroEnergyReadyHomeprogram.
RuralRepairandRehabilitationLoansTheVeryLow-IncomeHousingRepairprogramprovidesloansandgrantstoverylow-incomehomeownerstorepair,improve,ormodernizetheirdwellingsortoremovehealthandsafetyhazards.RuralRentalHousingTheRuralRentalHousingprogramisadaptableforparticipationbyawidevarietyofowners.Loanscanbemadetoindividuals,trusts,associations,partnerships,limitedpartnerships,stateorlocalpublicagencies,consumercooperatives,andprofitornon-profitcorporations.Individuals,partnerships,limitedpartnerships,for-profitcorporations,non-profitorganizations,limitedequitycooperatives,NativeAmericantribes,andpublicagenciesareeligibletoapply.For-profitborrowersmustagreetooperateonalimited-profitbasis(currentlyeightpercentoninitialinvestment).Borrowersmustbeunabletoobtaincreditelsewherethatwillallowthemtochargerentsaffordabletolow-andmoderate-incometenants.CommunityFacilitiesLoanProgramDesignatedCommunityProgramscanmakeandguaranteeloanstodevelopessentialcommunityfacilitiesinruralareasandtownsofupto20,000inpopulation.Loansandloanguaranteesareavailabletopublicentitiessuchasmunicipalities,counties,andspecial-purposedistricts,aswellastonon-profitcorporationsandtribalgovernments.
UtilitiesLoanAssistance:
ElectricLoanandLoanGuaranteeProgramSeepage58formoreinformationontheRuralUtilitiesServiceElectricLoanandLoanGuaranteeProgram.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE53
WaterandWasteDisposalDirectLoansandGrantsThepurposeoftheWaterandWasteDisposalDirectLoansandGrantsProgramistodevelopwaterandwastedisposalsystemsinruralareasandtownswithapopulationnotinexcessof10,000.Thefundsareavailabletopublicbodies,non-profitcorporations,andIndiantribes.Toqualify,applicantsmustbeunabletoobtainthefinancingfromothersourcesatratesandtermstheycanaffordand/ortheirownresources.Fundscanbeusedforconstruction,landacquisition,legalfees,engineeringfees,capitalizedinterest,equipment,initialoperationandmaintenancecosts,projectcontingencies,andanyothercostthatisdeterminedbytheRuralDevelopmenttobenecessaryforthecompletionoftheproject.Projectsmustbeprimarilyforthebenefitofruralusers.WaterandWasteDisposalGuaranteedLoansThepurposeoftheWaterandWasteDisposalGuaranteedLoanProgramistoprovideloanguaranteesfortheconstructionorimprovementofwaterandwastedisposalprojectsservingthefinanciallyneedycommunitiesinruralareas.Thispurposeisachievedthroughbolsteringtheexistingprivatecreditstructurethroughtheguaranteeofqualityloanswhichwillprovidelastingbenefits.Thewaterandwastedisposalguaranteeloansaretoserveapopulationnotinexcessof10,000inruralareas.Guaranteedloansaremadeandservicedbylenderssuchasbanks,savingsandloanassociations,mortgagecompanies,andothereligiblelendersundertheGuaranteeLoanProgram.Thesefundsareavailabletobeusedbypublicbodies,non-profitcorporations,andIndiantribes.Toqualify,applicantsmustbeunabletoobtaintherequiredcreditwithouttheloanguaranteefromprivate,commercial,orcooperativesourcesatreasonableratesandterms.Eachborrowermusthaveorwillobtainthelegalauthoritynecessarytoconstruct,operateandmaintaintheproposedfacilityandservices.Thefacilitiesmustbelocatedinaruralarea.Allfacilitiesfinancedunderthisprovisionshallbeforpublicpurposes.Guaranteedloansmaybemadeincombinationwithdirectloans.
FORMOREINFORMATION
MoreinformationaboutRuralDevelopment’sLoanAssistancecanbefoundonlineat:http://www.rd.usda.gov/programs-services/all-programsMoreinformationabouttheBusinessandIndustryLoanGuarantee(B&I)Programcanbefoundonlineat:http://www.rd.usda.gov/programs-services/business-industry-loan-guaranteesSeetheAdditionalUSDALocalImplementationInformationsectiononpage64forRuralDevelopmentBusinessProgramsDirectorsList.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE54
ForBusinessLoanAssistance:JohnBroussard,Director,BusinessandIndustryDivisionUSDARuralDevelopmentPhone:(202)690-4103Email:John.Broussard@wdc.usda.govForHousingandCommunityFacilitiesLoanAssistance:MeghanWalsh,ArchitectUSDARuralHousingServicePhone:(202)205-0903Email:[email protected]:JonClaffeyUSDARuralDevelopmentPhone:(202)720-1900Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE55
USDARuralEnergyforAmericaProgram
DESCRIPTION
TheRuralEnergyforAmericaProgram(REAP)providesassistancetoagriculturalproducersandruralsmallbusinessestocompleteavarietyofprojects.Offeringbothloanguaranteesandgrants,theREAPprogramhelpseligibleapplicantsinstallrenewableenergysystems,suchassolarpanelsoranaerobicdigesters;makeenergyefficiencyimprovements,suchasreplacingirrigationpumpsorventilationsystems;andconductenergyauditsandfeasibilitystudies.REAPiscomprisedofthefollowingcomponents:
• TheRenewableEnergySystemandEnergyEfficiencyImprovementGuaranteedLoanandGrantProgramprovidesfinancialassistancetoagriculturalproducersandruralsmallbusinessestopurchase,install,andconstructrenewableenergysystems;makeenergyefficiencyimprovements;anduserenewabletechnologiesthatreduceenergyconsumption.
• TheEnergyAuditandRenewableEnergyDevelopmentAssistanceGrantProgramprovidesgrantassistancetoentitiesthatwillassistagricultureproducersandsmallruralbusinessesbyconductingenergyauditsandprovidinginformationonrenewableenergydevelopmentassistance.
ELIGIBLEACTIVITIESANDINVESTMENTSGuaranteedloanandgranteligibilityislimitedtoruralsmallbusinessesandagriculturalproducers.Anagriculturalproducerisanindividualorentitydirectlyengagedintheproductionofagriculturalproducts(crops,livestock,forestryproducts,hydroponics,nursery,andaquaculture)whereby50percentorgreateroftheirgrossincomeisderivedfromtheoperations.AprivateentityisconsideredasmallbusinessinaccordancewiththeSmallBusinessAdministration’sSmallBusinessSizeStandards.Thelendermustbeeligiblefortheprogram.Lendersincludefederalandstate-charteredbanks,FarmCreditSystembanks,andsavingsandloanassociations.OtherlendersmaybeeligibleifapprovedbyUSDA.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE56
Forbothloanguaranteesandgrants,projectsmustmeetthefollowingconditions:
• Theloan/grantmustgotowardsthepurchaseofarenewableenergysystemortomakeenergyefficiencyimprovements;
• Thetechnologymustbecommerciallyavailableandreplicable;• Theprojectmusthavetechnicalmerit,asspecifiedinRural
DevelopmentRegulation4280subpartB;• Aruralsmallbusinessmustbelocatedinaruralarea,thoughan
agricultureproducermaybelocatedinaruralornon-ruralarea;• Theapplicantmustbetheowneroftheprojectandcontrolthe
revenues,expenses,operations,andmaintenanceoftheproject;• Sitesmustbecontrolledbytheagriculturalproducerorsmallbusiness
forthefinancingtermofanyassociatedfederalloansorloanguarantees;and,
• Theprojectmusthavesatisfactorysourcesofrevenueforthelifeoftheprojectthatwillbeusedfortheoperation,management,maintenance,anddebtservice.
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rd.usda.gov/programs-services/rural-energy-america-program-renewable-energy-systems-energy-efficiencyYoumayalsocontactyourstateRuralEnergyCoordinator:http://www.rd.usda.gov/files/RBS_StateEnergyCoordinators.pdfProgramContactMarkBrodziski,Director,EnergyDivisionUSDARuralDevelopmentPhone:(202)205-0903Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE57
USDATheRuralUtilitiesService:ElectricLoanProgram
DESCRIPTION
TheRuralUtilitiesService(RUS)ElectricLoanProgramprovidesleadershipandcapitaltoupgrade,expand,maintain,andreplaceAmerica'svastruralelectricinfrastructure.UndertheauthorityoftheRuralElectrificationActof1936,theelectricprogramsmakedirectloansandloanguaranteestoelectricutilitiestoservecustomersinruralareas.Throughtheelectricprograms,thefederalgovernmentisthemajoritynoteholderforover600electricsystemsborrowersin46states,servingmorethan40millioncustomers.TheElectricLoanProgramoffersfinancingassistancethroughFederalFinancingBank(FFB)GuaranteedLoans.Theprimarydifferencesbetweentheprogramsarethequalifyingcriteriaandtheinterestrateforeachtypeoffinancing.CurrentinterestratesfortheseloanprogramsmaybefoundontheRatespage:http://www.rurdev.usda.gov/UEP_Rates.html
ELIGIBLEACTIVITIESANDINVESTMENTSLoansaremadetocorporations,states,territoriesandsubdivisionsandagenciessuchasmunicipalities,people'sutilitydistricts,andcooperative,non-profit,limited-dividend,ormutualassociationsthatprovideretailelectricserviceneedstoruralareasorsupplythepowerneedsofdistributionborrowersinruralareas.Theloansandloanguaranteesfinancetheconstructionofelectricdistribution,transmission,andgenerationfacilities,includingsystemimprovementsandreplacementsrequiredtofurnishandimproveelectricserviceinruralareas.Inaddition,thesefinanceinstrumentscanbeusedfordemandsidemanagement,energyconservationprograms,andon-gridandoff-gridrenewableenergysystems.Inaddition,pleaserefertoTheRuralUtilitiesService’sEnergyEfficiencyandConservationLoanProgram,whichwaslaunchedonDecember5,2013.ThisprogramexpandsthetypesofprojectsthatcanbesupportedbyruralcooperativesthatdrawontheRUSlendingfacility.TheprogramallowsRUStofinance:
• Allenergyefficiencymeasuresonaconsumerpremises;• Distributedgenerationforon-oroff-gridrenewableenergysystems;• Demandsidemanagementinvestments;
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE58
• Energyaudits;• Consumereducationandoutreachprograms;• Powerfactorcorrectionequipmentontheconsumersideofthe
meter;• Re-lampingtomoreenergyefficientlighting;• OtherenergyefficiencyprograminvestmentsapprovedbyRUS
residentialandcommercialenergyaudits;and,• Communityawarenessandoutreachprograms.
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rurdev.usda.gov/UEP_Homepage.htmlProgramContactJimElliottUSDARuralDevelopment–ElectricProgramU.S.DepartmentofAgriculturePhone:(202)720-9546Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE59
USDATheRuralUtilitiesService:EnergyEfficiency&ConservationLoanProgram
DESCRIPTION
InDecember2013,theRUSElectricProgrampublishedthefinalrulefortheEnergyEfficiencyandConservationLoanProgram.ThefinalruleimplementsSection6101ofthe2008FarmBill,andexpandstheelectricprogram’sabilitytomakeloansforenergyefficiencyactivities(e.g.,buildingweatherization,HVACupgrades,groundsourceheatpumps,lighting,smallscalerenewablegenerationsuchassolarandwind,energyaudits,andsoftcosts).ThenewregulationreducesbarrierstoinvestmentinenergyefficiencyandpromotesruraleconomicgrowthbyincreasingRUSborrowers’financingopportunities.Borrowerscaneitherloanthefundstoconsumersorutilizethemtoenhancetheutilitysystem’sefficiency–supportingbusinessesandhomeownersacrossruralAmerica.Notonlywilltheefficiencyupgradefundinghelpconsumersreducetheirmonthlyenergybills,butitwillalsoreducegreenhousegasesandpreventclimatechange.
ELIGIBLEACTIVITIESANDINVESTMENTSEntitiesnewtotheRUSprogrammustbedeemedeligibleundertheRuralElectrificationAct,whichwascreatedin1936tobringelectricitytoruralareas.Onceborrowersaredeemedeligible,theymayonlyborrowfundsforenergyefficiencyactivities.PotentialborrowersshouldreachouttoGeneralFieldRepresentativestafforheadquarterspersonnelforguidanceonsubmittinganapplication.Theywillneedtoprovidebothabusinessplanandqualityassuranceplantosupporttheloanapplication.Toassistwiththeapplicationprocess,theRUSElectricProgramofferswebinarsandinformationsessionswithpotentialborrowers.
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rurdev.usda.gov/uep_homepage.html
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE60
USDATheRuralUtilitiesService:HighEnergyCostGrantProgram
DESCRIPTION
TheHighEnergyCostGrantProgramprovidesgrantstopurchase,construct,install,repair,replace,orimproveenergygeneration,transmission,ordistributionfacilitiesincommunitieswithextremelyhighenergycoststhatareatleast275percenthigherthanthenationalaverage.On-gridandoff-gridrenewableenergyprojects,energyefficiency,andenergyconservationprojectsareeligible.
ELIGIBLEACTIVITIESANDINVESTMENTSGrantsaremadetostates,politicalsubdivisionsofstates,for-profitandnon-profitbusinesses,cooperatives,associations,organizations,andotherentitiesorganizedunderthelawsofstates,Indiantribes,tribalentities,andindividuals.ThegovernmentsandentitieslocatedinanyU.S.Territory/possessionorotherareaauthorizedbylawtoreceivetheservicesandprogramsoftheRuralUtilitiesServiceortheRuralElectrificationActof1936,asamended,arealsoeligible.Projectsmustserveruralcommunitiesinwhichtheannualaverageresidentialexpenditureforhomeenergyisatleast275percentofthenationalaverage.Grantfundsmaybeusedtoacquire,construct,extend,upgrade,orotherwiseimproveenergygeneration,transmission,ordistributionfacilitiesservingeligiblecommunities.Allenergygeneration,transmission,anddistributionfacilitiesandequipment,usedtoprovideelectricity,naturalgas,homeheatingfuels,andotherenergyservicetoeligiblecommunitiesareeligible.Projectsprovidingorimprovingenergyservicestoeligiblecommunitiesthroughon-gridandoff-gridrenewableenergyprojects,energyefficiency,andenergyconservationprojectsareeligible.Agrantprojectiseligibleifitimproves,ormaintainsenergyservices,orreducesthecostsofprovidingenergyservicestoeligiblecommunities.Grantfundsmaynotbeusedtopayutilitybillsortopurchasefuels.Grantsmaycoveruptothefullcostsofanyeligibleprojectssubjecttothestatutoryconditionthatnomorethanfourpercentofgrantfundsmaybeusedfortheplanningandadministrativeexpensesofthegrantee.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE61
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rurdev.usda.gov/UEP_Homepage.htmlUSDARuralDevelopment–RuralUtilitiesService,ElectricProgramU.S.DepartmentofAgriculturePhone:(202)720-9545Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE62
USDATheRuralUtilitiesService:RuralEnergySavingsProgram
DESCRIPTION
TheRuralUtilitiesServiceprovidesRuralEnergySavingsProgram(RESP)loanstoeligibleentitiesthatagreeto,inturn,makeloanstoqualifiedconsumersforthepurposeofimplementingenergyefficiencymeasures.UnderRESP,eligibleentitieswillborrowfundsatazeropercentinterestratefromRUSandwillbepermittedtochargenomorethanathreepercentinterestratetoqualifiedconsumers.Theseloansaremadeavailableundertheauthorityofsection6407oftheFarmSecurityandRuralInvestmentActof2002(7U.S.C.8107a).
ELIGIBLEACTIVITIESANDINVESTMENTSEligibleenergyefficiencymeasuresfundedunderRESPmustbefororatapropertyorpropertiesservedbyaRESPborrower,usingcommerciallyavailabletechnologiesthatwouldallowqualifiedconsumerstodecreasetheirenergyuseorcoststhroughcost-effectivemeasures.LoansmadebyRESPborrowersunderthisprogrammayberepaidthroughchargesaddedtothequalifiedconsumer’sbillforthepropertyorpropertiesfor,oratwhich,energyefficienciesareorwillbeimplemented.Loansmadetothequalifiedconsumersmustbebyanamountthatensures,tothemaximumextentpracticable,thataloanterm,ofnotmorethantenyears,willnotposeanunduefinancialburdenonthequalifiedconsumer.PotentialborrowersshouldreachouttoGeneralFieldRepresentativestafforheadquarterspersonnelforguidanceonfundingavailability,anddeadlinesandprocedurestosubmitaloanapplication.Toassistwiththeapplicationprocess,theRUSElectricProgramofferswebinarsandinformationsessionswithpotentialborrowers.
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.rurdev.usda.gov/uep_homepage.html
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE63
USDAAdditionalLocalImplementationInformation
ADDITIONALUSDALOCALIMPLEMENTATIONINFORMATION
RuralDevelopmentBusinessProgramsDirectorsListhttp://www.rurdev.usda.gov/BCP_BI_ProgramDirectorList.htmlRuralDevelopmentBusinessProgramsEnergyBranch–EnergyCoordinatorshttp://www.rurdev.usda.gov/BCP_Energy_CoordinatorList.htmlRuralDevelopmentStateOfficeshttp://www.rurdev.usda.gov/stateofficeaddresses.htmlRuralElectricCo-ops(QualifiedLenders)https://www.nreca.coop/about-electric-cooperatives/member-directoryEnergyMatrixUSDAhasmanyprogramstoassistfarmers,ruralresidents,andthenationtorespondtoenergy-relatedissuesandopportunities.Theserangefrombasicscientificresearchtothedevelopmentandcommercializationofnewtechnologies.Frommoreefficientfarmingtechniques,windfarms,andethanolplantstobiochemicalandgenomicsresearch,USDAisdeeplyinvolvedinandcommittedtothenation'squestforenergysecurity.TheEnergyMatrixisanavigationalaide.USDA'senergyrelatedprogramsarelargeinscope,andextendamongmanyUSDAagenciesandmissionareas.Thesiteisavailabletosearchforalternativeandaffordableenergysolutions,fundingforprojects,availableprogramsandprograminformation,orresearchanddevelopmentprogramsandinitiatives.TheEnergyMatrixisUSDA'sone-stop-shoppingmatrixservingthepublic,privatebusinessesandthegovernment.USDA’sEnergyMatrixcanbefoundhere:http://www.usda.gov/energy/matrix/home
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE64
• EnergyEfficientMortgageProgram
• FHARiskSharing
• MultifamilyHousing
• PublicHousingCapitalFund
• PublicHousingEnergyPerformanceContracts
• RehabilitationMortgageAssistance:Section203(k)Loans
• Section108LoanGuaranteeProgram
� HUDCaseStudy� AdditionalHUDLocalImplementation
Information
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESDEPARTMENTOFHOUSINGANDURBANDEVELOPMENT
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE65
HUDEnergyEfficientMortgageProgram
DESCRIPTION
TheFederalHousingAdministration’s(FHA)EnergyEfficientMortgageprogram(EEM)helpshomebuyersorhomeownerssavemoneyonutilitybillsbyenablingthemtofinancethecostofimprovementsthatwillmaketheirhomemoreenergyefficient.Theprogramcanbeusedwithaneworexistinghome,aspartofaborrower’shomepurchaseormortgagerefinancetransaction.Thedesiredenergyefficiencyimprovementsarebundledintoan“energypackage”andmustbecost-effective.Acost-effectiveenergypackageisoneinwhichthecostoftheimprovements,includingmaintenanceandrepair,islessthanthevalueoftheenergysavedovertheestimatedusefullifeofthoseimprovements.Essentially,thefinancedenergypackageiscosteffectiveifitpaysforitselfwiththeenergysavings.Theborrowermustobtainahomeenergyassessment.Thepurposeoftheenergyassessmentistoidentifyopportunitiesforimprovingtheenergyefficiencyofthehomeandtheircost-effectiveness.Theassessmentmustbeconductedbyaqualifiedenergyrater,assessor,orauditorusingwhole-homeassessmentstandards,protocolsandprocedures.Qualifiedhomeenergyraters/assessorsmustbetrainedandcertifiedasoneofthefollowing:
• BuildingPerformanceInstituteBuildingAnalystProfessional• BuildingPerformanceInstituteHomeEnergyProfessionalEnergy
Auditor• ResidentialEnergyServicesNetworkHomeEnergyRater
Improvementsareeligiblewhentheyareconfirmedtomeetthecost-effectivetest.Becausethefinancedenergypackageiscost-effective,borrowersdonotneedtoincomequalifyfortheportionofthemortgagethatfinancestheenergypackage.Themortgageisunderwrittenasiftheenergypackagedidnotexist,i.e.,byusingstandardFHAunderwritingstandards,qualifyingincomeratios,andmaximummortgage/minimumcashinvestmentrequirementswithoutregardtotheenergypackage.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE67
ELIGIBLEACTIVITIESANDINVESTMENTS
AllpersonswhomeettheincomerequirementsforFHA'sstandardSection203(b)insuranceandcanmakethemonthlymortgagepaymentsareeligibletoapply.EEMcanbeusedtomakeenergyefficientimprovementsinonetofourunitexistingandnewhomes.Theimprovementscanbeincludedinaborrower'smortgageonlyiftheirtotalcostislessthanthetotaldollarvalueoftheenergythatwillbesavedduringtheirusefullife.EEMcanalsobeusedwithFHA'sSection203(h)programformortgagesmadetovictimsofpresidentiallydeclareddisasters.ThemortgagemustcomplywithbothSection203(h)requirements,aswellasthoseforEEM.However,theprogramislimitedtooneunitdetachedhouses.OthereligibilityrequirementsmaybefoundintheHomeowner'sGuide,availableonlineat:http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/eem/eemhog96
FORMOREINFORMATIONVisittheFHAResourceCenterat:http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/fharesourcectrProgramContactPatriciaMcBarron,CreditPolicySpecialistU.S.DepartmentofHousingandUrbanDevelopmentPhone:(202)402-5389Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE68
HUDFHARiskSharing
DESCRIPTION
Section542(c)enablesHUDandstateandlocalhousingfinanceagencies(HFAs)toprovidenewrisk-sharingarrangementstohelpthoseagenciesprovidemoreinsuranceandcreditformultifamilyloans.ArelatedprogramistheQualifiedParticipatingEntities(QPE)RiskSharingProgram:Section542(b).TheprogramprovidesnewinsuranceauthorityindependentoftheNationalHousingAct.Section542(c)providescreditenhancementformortgagesofmultifamilyhousingprojectswhoseloansareunderwritten,processed,serviced,anddisposedofbyHFAs.HUDandHFAsshareintheriskofthemortgage.Theprogramwasoriginallydesignedasapilottoassessthefeasibilityofrisk-sharingpartnershipsbetweenHUDandqualifiedstateandlocalHFAsinprovidingaffordablehousing.In2001,PublicLaw106-377,knownastheFY2001AppropriationsAct,convertedthepilotprogramtoapermanentmultifamilyinsuranceprogram.Theunitallocationandcreditsubsidyobligationrequirementsofthedemonstrationprogramarenolongerineffect.
ELIGIBLEACTIVITIESANDINVESTMENTS
ParticipatingqualifiedstateandlocalHFAsmayoriginateandunderwriteaffordablehousingloansincludingnewconstruction,substantialrehabilitation,refinancing,andhousingfortheelderly.TheprogramprovidesfullFHAmortgageinsurancetoenhanceHFAbondstoinvestmentgrade.HFAsmayelecttosharefrom10to90percentofthelossonaloanwithHUD.TheHFAreimbursesHUDintheeventofaclaimpursuanttotermsoftherisksharingagreement.AnHFAmustbeapprovedbyHUDtoparticipateinthisprogram.TobeeligibletheHFAmust:(1)carrythedesignationof"toptier"oritsequivalentasevaluatedbyStandard&Poor'soranothernationallyrecognizedratingagency;or(2)receiveanoverallratingof"A"fortheHFAforitsgeneralobligationbondsfromanationallyrecognizedratingagency;and(3)otherwisedemonstrateitscapacityasasound,well-managedagencythatisexperiencedinfinancingmultifamilyhousing;and(4)haveatleastfiveyearsofexperienceinmultifamilyunderwriting;and(5)beaHUD-approvedmultifamilymortgageingoodstanding.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE69
Eligiblemortgagorsincludeinvestors,builders,developers,publicentities,andprivatenon-profitcorporationsorassociationsmayapplytoaqualifiedHFA.Individuals,families,andpropertyownersmaybeeligibleforaffordablehousing.
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/progdesc/riskshare542cProgramContactDanSullivan,ActingDirectorMultifamilyProductionU.S.DepartmentofHousingandUrbanDevelopmentOffice:(202)402-6130Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE70
HUDMultifamilyHousing
DESCRIPTION
HUD-FHAmortgageinsuranceprogramsformultifamilypropertiesprovidelong-term(35-40years)fixedrate,fullyamortizingloansforrefinancing,acquisition,rehabilitationandnewconstructionofmultifamilyproperties.Suchpropertiesmusthavefiveormoreunits,eachwithcompletekitchensandbaths,offeredformonthlyrentfornon-transienttenancy(e.g.nodaily,weeklytenancyortemporaryshelter).MortgageinsuranceisauthorizedfordifferentcircumstancesunderseveraltitlesoftheNationalHousingActasfollows:
• Refinanceoracquisitionofexisting,occupiedandoperatingproperties:Section207/223(f);
• Refinanceofalreadyinsuredexistingproperties:Section207/223(a)(7);
• Supplementalloans(2ndliens)foralreadyinsuredproperties:Section241(a);
• Newconstructionorsubstantialrehabilitationunderthefollowing:
o Section221(d)(4)forgeneraloccupancyo Section221(d)(4)forgeneraloccupancyo Section220forgeneraloccupancyinredevelopmentareaso Section231forelderlypersons(62+)andnon-elderlydisabled(up
to25percentofunits).
Detailedinformationoneachoftheseprogramsmaybefoundat:http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/mfh/progdescInsuredmortgagesareavailableonlythroughHUD-FHAapprovedlenders.Contactanapprovedlenderformoreinformationonspecificloanrequirementsandhowtoapply.Alistofapprovedlendersmaybefoundat:http://portal.hud.gov/hudportal/documents/huddoc?id=aprvlend.pdf
ELIGIBLEACTIVITIESANDINVESTMENTS
EnergyInitiativesforHUD-FHAMortgageInsurancePrograms:EffectiveMay28,2016allapplicantsforinsuredmortgagesmustmeetcertainenergyefficiencyrequirements:
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE71
• UtilityconsumptionmustbebenchmarkedbyreportingconsumptiondatathroughEPA’sPortfolioManager;
• AminimumEnergyStar®Scoreof60mustbeobtained,andifnotthen:o Fornewconstructionandgutrehabilitation-Drawingsand
specificationsmustberevisedtoachievetheminimumscore;o Forsubstantialrehabilitation(lessthangutrehab)-AnASHRAE
LevelIIEnergyAuditmustbeobtainedandcostbeneficialconservationmeasuresimplemented;
o Forrefinanceoracquisitionofexistingproperties-AnASHRAELevelIIEnergyAuditmustbeobtainedandcostbeneficialconservationmeasuresidentified.Documentedsavingsestimatedforconservationsmeasuresimplementedthroughfundedrepairsandalterationswillbeunderwrittenat75centsforeverydollarofsavings.
EffectiveApril1,2016,reducedmortgageinsurancepremiumsareavailableforpropertiesthatmeetthefollowingrequirements:
• AchievementofanindustryrecognizedGreenStandardofbuildingperformanceeitherpriortoapplicationoraspartofproposednewconstructionorrehabilitation;
• SeparateverificationofenergyefficiencybymeansofanEnergyStar®Scoreof75orbetter;and
• OngoingenergyefficientperformanceevidencedbyannualsubmissionofanEnergyStar®Scoreof75orbetter.
ProgramBenefitsforBorrowers:
• HUD-FHAunderwritesreducedoperatingexpenseresultingfromdocumentedenergyconservationmeasuresyieldinghigherloanamountsbasedonimprovednetoperatingincomeofproperties;
• HUD-FHAtreatsthecostofenergyconservationmeasuresaseligiblecostsofconstruction,rehabilitation,repairsoralterations,whichmaybefundedfromloanproceeds;
• Ownerssecuringreductionsinmortgageinsurancepremiumsachieveapermanentreductioninthecostofborrowingwhichmayalsoresultinhigherloanamountsresultingfromimproveddebtservicecoverage;
• Ownersenjoylowerenergycosts,improvedpropertyperformanceandtenantsatisfaction;and
• OwnersobtainingGreenStandardcertificationareabletousethisrecognitioninmarketingtheirproperty.
FORMOREINFORMATION
ProgramContactDanSullivan,ActingDirectorMultifamilyProductionU.S.DepartmentofHousingandUrbanDevelopmentOffice:(202)402-6130Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE72
HUDPublicHousingCapitalFund
DESCRIPTION
ThePublicHousingCapitalFundisavailablebyformuladistributionforcapitalandmanagementactivities,includingdevelopment,financing,andmodernizationofpublichousingprojects,whichincludes:
• Improvementofenergyandwater-useefficiencybyinstallingorchangingfixturesandfittings;
• Integratedutilitymanagementandcapitalplanningtomaximizeenergyconservationandefficiency;
• Redesign,reconstruction,andreconfigurationofpublichousingsitesandbuildings(includingaccessibilityimprovements)anddevelopmentofmixed-financeprojects;
• Vacancyreduction;• Addressingdeferredmaintenanceneedsandthereplacementof
obsoleteutilitysystemsanddwellingequipment;• Plannedcodecompliance,managementimprovements,includingthe
establishmentandinitialoperationofcomputercentersinandaroundpublichousingthroughaNeighborhoodNetworksinitiative,forthepurposeofenhancingself-sufficiency,employability,andeconomicself-relianceofpublichousingresidentsbyprovidingthemwithon-sitecomputeraccessandtrainingresources;
• Demolitionandreplacement;• Residentrelocation;• Capitalexpenditurestofacilitateprogramstoimprovethe
empowermentandeconomicself-sufficiencyofpublichousingresidents,andimproveresidentparticipation;
• Capitalexpenditurestoimprovesafetyandsecurityofresidents;and,homeownersactivities,includingprogramsunderSection32.
BasedonSection9,notmorethan20percentofapublichousingagency’s(PHA)capitalfundsmaybeusedforoperatingexpensesifthePHA’splanprovidesforsuchuse.However,non-troubledPHAsthatownoroperatefewerthan250unitshavefullflexibilityinhowtheyusecapitalandoperatingfundsforeligibleactivitiesunderSections9(d)(i)and9(e)(i).PHAsmayrequestHUDapprovaltoborrowfundsfromtheprivatemarkettomakeimprovementstoand/ordevelopadditionalpublichousing,bypledgingaportionoftheirfutureannualCapitalFundgrantstomakedebtservicepayments.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE73
ELIGIBLEACTIVITIESANDINVESTMENTS
PublicHousingAuthoritiesareeligibleforthePublicHousingCapitalFund.FORMOREINFORMATION
Moreinformationcanbefoundonlineat:http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/capfund
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE74
HUDPublicHousingEnergyPerformanceContracts
DESCRIPTION
PublicHousingEnergyPerformanceContracting(EPC)isaninnovativefinancingtechniquethatusescostsavingsfromreducedenergyconsumptiontorepaythecostofinstallingenergyconservationmeasures.NormallyofferedbyEnergyServiceCompanies(ESCOs),thisinnovativefinancingtechniqueallowsbuildinguserstoachieveenergysavingswithoutup-frontcapitalexpenses.Thecostsoftheenergyimprovementsaregenerallypaidforwitheligiblethird-partyfinancingandpaidbackoutoftheenergysavings.Otheradvantagesincludetheabilitytouseasinglecontractortodonecessaryenergyauditsandretrofitandtoguaranteetheenergysavingsfromaselectedseriesofconservationmeasures.
ELIGIBLEACTIVITIESANDINVESTMENTS
PublicHousingAuthoritiesareeligibleforEPC.FORMOREINFORMATION
Moreinformationcanbefoundonlineat:http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/programs/ph/phecc/eperformanceProgramContactChrisGolden,[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE75
HUDRehabilitationMortgageAssistance:Section203(k)Loans
DESCRIPTION
Thesection203(k)mortgageproductenableshomebuyersandhomeownerstofinanceboththepurchaseofahouseandthecostofitsrehabilitationthroughasinglemortgageortofinance(orrefinance)therehabilitationoftheirexistinghome.Inordertoqualifyforasection203(k)mortgage,thepropertybeingfinancedmustbeatleastayearold.Aportionoftheloanproceedsisusedtopaytheseller,or,inthecaseofarefinance,topayofftheexistingmortgage,andtheremainingfundsareplacedinanescrowaccountandreleasedasrehabilitationiscompleted.Thecostoftherehabilitationmustbeatleast$5,000,butthetotalloanvaluemuststillfallwithintheFHAmortgagelimitforthearea.Themaximumloanvalueisdeterminedbyeither(1)thevalueofthepropertybeforerehabilitationplusthecostofrehabilitation,or(2)110percentoftheappraisedvalueofthepropertyafterrehabilitation,whicheverisless.
ELIGIBLEACTIVITIESANDINVESTMENTS
TheextentoftherehabilitationcoveredbySection203(k)insurancemayrangefromrelativelyminor(thoughexceeding$5000incost)tovirtualreconstruction:ahomethathasbeendemolishedorwillberazedaspartofrehabilitationiseligible,forexample,providedthattheexistingfoundationsystemremainsinplace.Section203(k)insuredloanscanfinancetherehabilitationoftheresidentialportionofapropertythatalsohasnon-residentialuses;theycanalsocovertheconversionofapropertyofanysizetoaone-tofour-unitstructure.HUDrequiresthatpropertieswith203(k)loans,includingstreamlined(k)loans,meetcertainbasicenergyefficiencyandstructuralstandards,suchas:
• Improvingthethermalefficiencyofthedwelling:
o Weather-stripalldoorsandwindowstoreduceinfiltrationofairwhenexistingweather-strippingisinadequateornonexistent;
o Caulkorsealallopenings,cracksorjointsinthebuildingenvelopetoreduceairinfiltration;
o Insulateallopeningsinexteriorwallswherethecavityhasbeenexposedasaresultoftherehabilitation.Insulateceilingareaswherenecessary;
o Adequatelyventilateatticandcrawlspaceareas.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE76
• ReplacementSystems:o Heating,ventilating,andairconditioningsystemsupplyand
returnpipesandductsmustbeinsulatedwhenevertheyrunthroughunconditionedspaces;
o Heatingsystems,burners,andairconditioningsystemsmustbesizedtobenogreaterthan15percentoversizedforthecriticaldesign,heatingorcooling,excepttosatisfythemanufacturer'snextclosestnominalsize.
Thetypesofimprovementsborrowersmaymakeusing203(k)financinginclude:
• Makingandfacilitatingenergyconservationimprovementssuchas:o Renewableenergysystems(e.g.,solar,wind,geothermal,
biomass),o Wholehousewrappingandinsulation,o Sealingducts,o EnergyefficientHVACand/orappliances;
• Structuralalterationsandreconstruction;• Modernizationandimprovementstothehome'sfunction;• Eliminationofhealthandsafetyhazards;• Changesthatimproveappearanceandeliminateobsolescence;• Reconditioningorreplacingplumbing;installingawelland/orseptic
system;• Addingorreplacingroofing,gutters,anddownspouts;• Addingorreplacingfloorsand/orfloortreatments;• Majorlandscapeworkandsiteimprovements;and,• Enhancingaccessibilityforadisabledperson.
FORMOREINFORMATION
Moreinformationcanbefoundonlineat:http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/sfh/203k/203k--dfProgramContactKevinStevens,DirectoroftheHomeMortgageInsuranceDivisionU.S.DepartmentofHousingandUrbanDevelopmentPhone:(202)402-4317Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE77
HUDSection108LoanGuaranteeProgram
DESCRIPTION
TheSection108LoanGuaranteeprogram,theloanguaranteeprovisionoftheCommunityDevelopmentBlockGrant(CDBG)program,isoneofthemostpotentandimportantpublicinvestmenttoolsthatHUDofferstostateandlocalgovernments.Section108allowscommunitiestotransformasmallportionoftheirCDBGfundsintofederallyguaranteedloanslargeenoughtopursuephysicalandeconomicrevitalizationprojectsthatcanrenewentireneighborhoods.TheSection108programisasourceoffinancingforeconomicdevelopment,housingrehabilitation,publicfacilitiesrehabilitation,constructionorinstallation,forthebenefitoflow-tomoderate-incomepersonsortoaidinthepreventionofslumsorblight.SecuritySection108loansarenotrisk-free;theprincipalsecurityfortheloanguaranteeisapledgebytheapplicantpublicentityorstateofitscurrentandfutureCDBGfunds.Additionalsecuritywillalsoberequiredtoassurerepaymentofguaranteedobligations.Theadditionalsecurityrequirementswillbedeterminedonacase-by-casebasis,butcouldincludeassetsfinancedbytheguaranteedloan.RepaymentThemaximumrepaymentperiodforaSection108loanguaranteeis20years.HUDhastheabilitytostructuretheprincipalamortizationtomatchtheneedsoftheprojectandborrower.Eachannualprincipalamountwillhaveaseparateinterestrateassociatedwithit.FinancingSourceSection108obligationsarefinancedthroughunderwrittenpublicofferings.FinancingbetweenpublicofferingsisprovidedthroughaninterimlendingfacilityestablishedbyHUD.InterestRatesandFeesInterestratesoninterimborrowingarepricedatthethreemonthLondonInterbankOfferedRate(LIBOR)plus20basispoints(0.2percent).PermanentfinancingispeggedtoyieldsonU.S.Treasuryobligationsofsimilarmaturitytotheprincipalamount.Asmalladditionalbasispointspread,dependingonmaturity,willbeaddedtotheTreasuryyieldtodeterminetheactualrate.Additionally,allnewcommitmentscarryafeebasedonthepercentageoftheSection108loanamount.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE78
DefaultTodate,therehasbeennodefaultunderSection108resultinginarepaymentbyHUD.Intheeventofdefaultrequiringapayment,HUDwouldcontinuetomakepaymentsontheloaninaccordancewithitsterms.ThesourceofpaymentsbyHUDpursuanttoitsguaranteewouldalmostalwaysbepledgedCDBGfunds.However,HUDdoeshaveborrowingauthoritywiththeU.S.Treasuryifthepledgedfundsareinsufficient.
ELIGIBLEACTIVITIESANDINVESTMENTS
EligibleApplicants:
• Metropolitancitiesandurbancounties(i.e.,CDBGentitlementrecipients)
• Non-entitlementcommunitiesthatareassistedinthesubmissionofapplicationsbystatesthatadministertheCDBGprogram
• States• Non-entitlementcommunitieseligibletoreceiveCDBGfundsunder
theHUD-AdministeredSmallCitiesCDBGprogram• InsularAreas(AmericanSamoa;Guam;NorthernMarianaIslands;and
theVirginIslands)Forpurposesofdeterminingeligibility,CDBGrulesandrequirementsapply.AswiththeCDBGprogram,allprojectsandactivitiesmustprincipallybenefitlowandmoderate-incomepersons,aidintheeliminationorpreventionofslumsandblight,ormeetacommunity'surgentneeds.EligibleActivities:
• EconomicdevelopmentactivitieseligibleunderCDBG• Acquisitionofrealproperty• Rehabilitationofpubliclyownedrealproperty• HousingrehabilitationeligibleunderCDBG• Construction,reconstruction,orinstallationofpublicfacilities
(includingstreet,sidewalk,andothersiteimprovements)• Relatedrelocation,clearance,andsiteimprovements• Paymentofinterestontheguaranteedloanandissuancecostsof
publicofferings• Debtservicereserves• Publicworksandsiteimprovementsincolonias• Inlimitedcircumstances,housingconstructionascommunity
economicdevelopmentFORMOREINFORMATION
Moreinformationcanbefoundonlineat:https://www.hudexchange.info/programs/section-108
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE79
Section108programregulationscanbefoundat24CFR570subpartM.ProgramContactB.CorySchwartzFinancialManagementAnalystU.S.DepartmentofHousingandUrbanDevelopmentPhone:(202)402-4105Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE80
HUDCaseStudy
HUDCASESTUDY:PublicHousingAuthorityLeveragesPower
PurchaseAgreementforJurisdiction-WideScatteredSiteSolarInstallations
TheDenverHousingAuthority(DHA)launchedapublic-privatepartnershiptoinstallsolarphotovoltaicsystemsacrossitsportfolioofscattersite,singlefamilyresidentialbuildings.TheinstallationsarefinancedthroughaPowerPurchaseAgreement(PPA)withasolarproviderthatenablesthePublicHousingAuthority(PHA)toachievesolarinstallationswithnoup-frontcapitalcosts.UnderthePPA,themeterholderswouldpayforthepowergeneratedfromtheinstalledsystems,initiallypricedatarateroughlycomparabletothecurrentrates.Energysavingswouldoccurinout-yearsasutilityratesincreasedbeyondtheenergyratespecifiedinthePPA. ThisisthefirsttimeaPHAusedaPPAtoachievesolarinvestmentsacrossanentiresegmentofthePHAportfolio.ThismodelcanbeusedbyotherPHAstoinitiate“wholeportfolio”renewablesolutions.Akeymotivationfortheprojectwasinsecuringfixedandpredictablelong-termutilitycostsandpurchasingenergyproductionfromarenewablesource.Theprojectbeganinsummer2011,whenDHA,representedbyBallardSpahr,issuedacompetitiverequestforproposalstosolicitaprivatepartytoinstall,own,andoperatesolarelectricgenerationsystemsonthebuildings.Thereafter,DHAselectedaprivateprojectdeveloperandexecutedaPPAandSiteLicenseAgreement.ThePPAwasdevelopedbygroupingsofexistingmulti-familypropertiesandhousingunitsforalarge-scalesolarelectricproject.Inall,378systemsserving668predominatelysinglefamilyresidenceswereinstalled.Asignificantchallengewasinlocatingasourceofcapitalforarenewableenergyprojectscatteredacross378sites.Toaccomplishthis,DHAwasabletotakeadvantageoflow-costdebtfinancingprovidedthroughtheissuanceofQualifiedEnergyConservationBonds.Theratesonthosebondsforborrowerswithstrongcreditarenearzeropercentovera20-yearterm.Inadditiontosupportingcommunityrenewableenergyobjectives,theprojectcreated40newgreenjobsinDenver.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE81
HUDAdditionalLocalImplementationInformation
ADDITIONALHUDLOCALIMPLEMENTATIONINFORMATION
HUDLocalOffices http://portal.hud.gov/hudportal/HUD?src=/localofficesHUDRegionalOfficeLiaisons
RegionI: TomChase,[email protected]: JacobLevine,[email protected]: RebeccaMaclean,[email protected]: JerrieMagruder,[email protected]: DaleDarrow,[email protected]
BrianGillen,[email protected]: JerlindaBanks,[email protected]
LeslieAnnBradley,[email protected]: EnriqueShaw,[email protected]: GuadalupeHerrera,[email protected]: WayneWaite,[email protected]: JerryRoyster,[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE82
• CleanEnergyFinanceFacilityfortheCaribbeanandCentralAmerica(CEFF-CCA)
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESDEPARTMENTOFSTATE
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE83
STATECleanEnergyFinanceFacilityfortheCaribbeanandCentralAmerica(CEFF-CCA)
DESCRIPTION
TheCleanEnergyFinanceFacilityfortheCaribbeanandCentralAmerica(CEFF-CCA)isaninnovativefinancingprogramthataimstosupportprivate-sectorcleanenergydevelopmentinthetwofocalregions.ThefourU.S.governmentpartnerscollaboratingintheFacilityaretheU.S.DepartmentofState,USAID,USTDA,andOPIC.TheCaribbeanandCentralAmericahaveabundantrenewableenergyresources,yetsufferfromelectricityshortagesandhighprices.Thegoalofthetwo-yearprogramistocatalyzemuch-neededpublicandprivatesectorinvestmentincleanenergyprojectsbyprovidinggrantsupportforearly-stageprojectdevelopment.TheFacilitywillhelppromisingbutundercapitalizedprojectsaddresskeyplanningandfeasibilityissuesthatarecriticaltosuccessfulfinancingandimplementation.Inadditiontograntsupport,CEFF-CCAparticipationhasthepotentialtoopendoorstoadditionalOPICandUSTDAsupport,includingOPICloansandguarantees,politicalriskinsurance,andinvestmentfundsupport.USTDAoffersprojectdevelopmentsupportbeyondgrants.
ELIGIBLEACTIVITIESANDINVESTMENTSWhoiseligible?Facilityfundingisavailabletoinvestorsandprojectdevelopers,andtohostcountrypublicandprivatesectorprojectsponsorsinterestedinearlyplanningsupporttostructurebankableopportunitiesforimplementationfinancingorinsurance.Whattypesofprojectsareeligible?Cleanandrenewableenergyprojectsinthefollowingcategories:
• PowerGenerationProjectsinvolvingconstructionandoperationofrenewableenergypowergenerationfacilitiesforconnectiontothenationalgrid,localutilities,ordistributioncompanies.Projectsmustusecommerciallyproventechnologies.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE85
• Market-BasedSolutionsProjectsinvolvingsalesanddistributionofsmall-scalecleanenergysystemsandproductsthatprovideaccess,orextendthehoursofaccess,toelectricity.Examplesincludeoff-griddistributedgenerationsystems,self-containedsolarhomekits,pay-as-you-goaccesssystems,etc.
• RenewableEnergyInfrastructureCatalyzersProjectsthatintroduceorexpandessentialinfrastructureorprovideadditionalresourcestoaspecificmarket,whichrenewableenergysectoractorsmaythenleveragetoexpandrenewableenergyofferingstoatargetmarket.Examplesincludefinancingandleasingfacilities.
CEFF-CCAsupportwillalsobeconsideredforprojectsthatpromoteenergyefficiency,including:electricitygridlossmitigationandothersmartgridactivities,energyefficiencybuildingsolutions,andactivitiesthatmitigatetheneedfornewpowergeneration.Projectsmustmeetthefollowingcriteria:
• Haveclearsocialandeconomicbenefits,withprocessesinplacetomonitorandevaluatethesebenefits.
• Positiveimpactonenergyaccess,energysecurity,povertyalleviation,genderinclusion,andotherkeyconsiderationsimportanttoU.S.Governmentmissionsandactivitiesinthecountrywheretheprojectislocated.
• SupportlowemissionsdevelopmentinCentralAmericaandtheCaribbean.
HowcanCEFF-CCAfundsbeused?Fundsaretobeusedforprojectdevelopmentcoststhatarecriticaltotheprojectreachingfinancialclose(oranotherwiserelevantmilestone).ThefollowingisanillustrativelistofpermissibleusesofCEFF-CCAFunds:
• Financialandtechnicalpre-feasibilityandfeasibilitystudies• Engineeringcostsassociatedwithprojectdesign,technology
assessment,andoverallfeasibilitystudies• Legalcostsforpreparationofdocumentationrelatedtopermitting,
PPAsandotherpowersalesagreements,EPCs,O&M,[5]andfinancingagreements
• Costsforthepreparationofenvironmentalandsocialimpactstudies• Costsassociatedwiththeassessmentofphysicalandtechnical
availabilityandcharacterizationofrenewableresources• Othercostsassociatedwithconsulting,engineeringorlegalservices
neededtoreachfinancialclose,todevelopproofofconceptortopilotabusinesssolution,orwithscalingupofpowergeneration,energyefficiencyservices,orbusinesssolutions
• Costsassociatedwiththeeffortsofequityfunds,bankfinancingprograms,companies,ornon-governmentalorganizationstoidentify,select,prepareandaggregateprojectsforfunding,fortheusesenumeratedabove,andsubjecttotheexclusions,aboveandbelow
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE86
ProjectsinthefollowingcategoriesarenoteligibleforCEFF-CCASupport:
• Projectsthatinvolverenewableenergytechnologiesunprovenincommercialoperations(e.g.,wavetechnology).
• Captivepowerplantsthatintroducerenewableenergyforself-generationorforasinglecustomer,withoutabroaderdevelopmentalimpact,unlessitisinthecontextofbroaderscaleintroductionofdistributedgeneration.
• Energyefficiencyupgradesforanindividualcompany’suse(althoughenergyefficiencyconsulting,financingorinstallationservicescanbeconsidered).
• “Renewableresources”projectsthatdonothaveaprimaryrenewableenergycomponent(e.g.,sustainableagriculture,water,forestry,etc.).
• Retrofitprojectsinwhichrenewableenergysourcesreplacetraditionalfossilfuelsources(althoughbrownfieldprojectscanbeconsidered).
• ProjectsparticipatinginbidselectionprocessesthathavenotbeenawardedtheconcessionorMWallocation.
• Naturalgasprojects.• Nuclearpowerprojects.
InwhichcountriescanCEFF-CCAfundsbeused?
• AntiguaandBarbuda• Barbados• Belize• CostaRica• Dominica• DominicanRepublic• ElSalvador• Grenada• Guatemala• Haiti• Honduras• Jamaica• Nicaragua• Panama• St.KittsandNevis• St.Lucia• St.VincentandtheGrenadines• TrinidadandTobago
FORMOREINFORMATIONEmail:[email protected]
Online:www.ceff-cca.org
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE87
ProgramContactGeetaUhlEnvironmentTeamLeadOfficeofRegionalSustainableDevelopment(RSD)BureauforLatinAmericaandtheCaribbean(LAC)U.S.AgencyforInternationalDevelopment(USAID)[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE88
• TransportationInfrastructureFinanceandInnovationActProgram
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESDEPARTMENTOFTRANSPORTATION
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE89
DOTTransportationInfrastructureFinanceandInnovationActProgram
DESCRIPTION
TheTransportationInfrastructureFinanceandInnovationActof1998(TIFIA),asamended,establishedafederalcreditprogramforeligiblesurfacetransportationprojectsofregionalornationalsignificanceunderwhichtheDOTmayprovidethreeformsofcreditassistance-secured(direct)loans,loanguarantees,andstandbylinesofcredit.Creditassistanceisbasedonavarietyoffactorsincludingtheproject’sregionalornationalsignificance,theextenttowhichTIFIAparticipationwillfosterinnovativepublic-privatepartnerships,andtheproject’senvironmentalbenefits(seeChapter5oftheTIFIAProgramGuideforacompletelistofevaluationcriteriaat:https://www.transportation.gov/tifia/program-guide).Theprogram'sfundamentalgoalistoattractnewinvestmentcapitaltoprojectscapableofgeneratingrevenuesthroughuserchargesordedicatedfundingsourcesandtocomplementexistingfundingsourcesbyfillingmarketgaps;thereby,leveragingsubstantialprivatecapitalforcriticalimprovementstothenation'ssurfacetransportationsystem.DOTawardscreditassistancetoeligibleapplicants,whichincludestatedepartmentsoftransportation,transitoperators,specialauthorities,localgovernments,specialdistricts,andprivateentitiesorconsortiathatmayincludecompaniesspecializinginengineering,construction,materials,and/ortheoperationoftransportationfacilities.TheinterestrateonaTIFIAloanisequaltotherateonU.S.Treasurysecuritiesofsimilarmaturityonthedayofloanclosing.Thelineofcreditinterestrateisequaltothe30-yearTreasuryrate,andtherateonguaranteedloansissubjecttonegotiationbetweenborrowerandlenderandapprovalbyDOT.
ELIGIBLEACTIVITIESANDINVESTMENTSEligibleprojectsincludehighway,transit,passengerrail,intercitybusvehiclesandfacilities,certainportfacilities,surfacetransportationfacilitiesatairports,ruralinfrastructureprojects,transitorienteddevelopmentprojects(TOD),andanyothertypeofprojectthatiseligibleforgrantassistanceundertitle23orChapter53ofTitle49oftheUnitedStatesCode.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE91
Additionally,undertherecentlyenactedFixingAmerica’sSurfaceTransportationAct,TIFIAcreditassistancemaybeusedtocapitalizeStateInfrastructureBankstofundruralinfrastructureprojects.ToqualifyforTIFIAassistance,aprojectmustmeetthefollowingcriteria:
• Theprojectmusthavereasonablyanticipatedeligibleprojectcostsofatleast$50million(intelligenttransportationsystemprojectshavea$15millionminimumandatleast$10millionfortransit-orienteddevelopment,local,andruralprojects);
• TheTIFIAloanamountcannotexceed33percentofreasonablyanticipatedeligibleprojectcosts(unlessthesponsorprovidesacompellingjustificationforupto49percent);
• Federalfunding,includingtheTIFIAloanamount,cannotexceed80percentofreasonablyanticipatedeligibleprojectcosts;
• Seniordebtobligationsmustreceiveaninvestmentgraderating;• Theprojectmusthaveadedicatedrevenuesourcetopledgeas
repayment;and• Theprojectmustbeincludedintherelevantstate’stransportation
planningandprogrammingcycle.
FORMOREINFORMATION
Moreinformationcanbefoundonlineat:https://www.transportation.gov/tifia/program-guideorbycontactingtheDepartmentofTransportation’sTIFIAOfficeat(202)366-1059Casestudiescanbefoundonlineat:https://www.transportation.gov/tifia/projects-financedProgramContactDuaneCallender,DirectorU.S.DepartmentofTransportationPhone:(202)366-1059Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE92
• NewMarketsTaxCredits
• QualifiedEnergyConservationBonds
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESDEPARTMENTOFTHETREASURY
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE93
TREASURYNewMarketsTaxCredits
DESCRIPTION
TheNewMarketsTaxCredit(NMTC)Programhelpssmallandmedium-sizedbusinessesinlow-incomecommunitiesaccessfinancingthatisflexibleandaffordable.ThetaxcreditsattractcapitalinvestmentsinCommunityDevelopmentEntities(CDEs),whicharecertifiedintermediariesthatcantheninvestinprojects.FinancingfromCDEscanapplytoawiderangeofprojects,includinghousingdevelopments,renewableenergyinstallations,andfacilitiesthatprovidecommunityservices.TheNMTCsaredistributedinacompetitiveprocesstoCDEsthatproposespecifictypesofprojectsforfinancing.CDEsthatreceiveNMTCsusetheirauthoritytooffertaxcreditstoinvestorsinexchangeforequityintheCDE.Thecredittotals39percentoftheoriginalinvestmentamountandisclaimedoveraperiodofsevenyears(fivepercentforeachofthefirstthreeyears,andsixpercentforeachoftheremainingfouryears).TheinvestmentintheCDEcannotberedeemedbeforetheendoftheseven-yearperiod.Withthesecapitalinvestments,CDEscanmakeloansandinvestmentstobusinessesoperatingindistressedareasthathavebetterratesandtermsandmoreflexiblefeaturesthanthemarket.Termscanincludelowerinterestrates,flexibleprovisionssuchassubordinateddebt,loweroriginationfees,higherloan-to-values,lowerdebtcoverageandlongermaturity.TheCommunityDevelopmentFinancialInstitutions(CDFI)FundfacilitatesaccesstotheNewMarketsTaxCreditbypostingonlineaQualifiedEquityInvestmentreportthatlistsCDEswithunusedallocations,includingthenameandcontactinformationforthepersonateachCDE.
ELIGIBLEACTIVITIESANDINVESTMENTS
NMTCscanbeusedforawiderangeofprojects,includingprojectsthathaveenvironmentallysustainableoutcomesinlow-incomecommunities.Forexample,NMTCsmaybeusedtofinancetheconstructionorretrofitofbuildingsthatmeetthecommunityoutcomesdescribedintheNMTCApplicationsuchasreductioninenergyorwaterusebythebusinessortenants;and/orfinancebusinessesproducingand/ordistributingrenewableenergyresources(e.g.,biomass,hydro,geothermal,solar,wind).
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE95
EntitiescertifiedasCDEsthatreceivedNMTCarelistedintheNMTCProgramAllocateesStatesServedpagehere:https://www.cdfifund.gov/awards/nmtc/Pages/default.aspxClickonthestatewheretheprojectislocatedandthatwilltakeyoutoalistofCDEsthatservethatstate.EachCDEnameprovidesalinktothatCDE’sorganizationalprofile.WhilesomeCDEsmakeequityinvestmentsinqualifyingprojectsacrossthecountry,mostfocusonspecificcommunities.Inadditiontothemanylow-incomecensustractsinmetropolitanareas,therearenearly6,500censustractsinnon-metropolitanareasinwhichNewMarketsTaxCreditscanbeused.Bylaw,theCDFIProgrammustallocateNMTCsproportionallytonon-metropolitanareas.TheCDFIProgramprovidesmappingsoftwaretoexplorespecificcensustractsforwhichinvestmentscanqualifyforNewMarketTaxCredits.
FORMOREINFORMATION
MoreinformationcanbefoundonlineontheNewMarketsTaxCreditpage:https://www.cdfifund.gov/programs-training/Programs/new-markets-tax-credit/Pages/default.aspxStateReportsonCDFIsandNewMarketsTaxCreditsAllocates:http://www.cdfifund.gov/impact_we_make/state_reports.aspProgramContactRosaMartinez,AssociateProgramManagerU.S.DepartmentofTreasuryPhone:(202)653-0311Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE96
TREASURYQualifiedEnergyConservationBonds
DESCRIPTION
AQualifiedEnergyConservationBond(QECB)isabondthatenablesqualifiedstate,tribal,andlocalgovernmentissuerstoborrowmoneyatattractiveratestofundenergyconservationprojects.AQECBisamongthelowest-costpublicfinancingtoolsbecausetheU.S.DepartmentofTreasuryprovidesataxbenefittooffsettheissuer'sborrowingcosts.ThegovernmententitiesthathavereceivedQECBsallocatedbythefederalgovernmenthavesomeoptionsforstructuringtheofferings.Themostcommonisadirectpaymentbond,whichmeansbondissuersmayreceivepaymentsfromU.S.Treasuryasaportionoftheirinterestpayments.LikeBuildAmericaBonds,QECBsaretaxablebonds.ThismeansthatinvestorsmustpayfederaltaxesonQECBinteresttheyreceive.Congressauthorized$3.2billionofQECBissuancecapacitytobeallocatedtostates,localgovernmentsandtribalgovernmentsbaseduponpopulation.AlthoughalloftheQECBshavebeenallocated,mostofthesebondsremainavailabletostate,local,andtribalentitiesthathavenotyetissuedthemtofundspecificprojectsorprograms.
ELIGIBLEACTIVITIESANDINVESTMENTS
QECBproceedscanbeusedtofundcertainexpendituresonavarietyofprojectsincluding:
• Reducingenergyconsumptioninpubliclyownedbuildingsbyatleast20percent;
• Implementinggreencommunityprograms(includingloans,grants,orotherrepaymentmechanisms),suchasefficientstreetlightingreplacementsandloanprogramsforresidentialenergyefficiencyimprovements;
• Developingruralcapacity,specificallyinvolvingtheproductionofelectricityfromrenewableenergyresources;
• Supportingenergy-relatedresearchfacilitiesandgrants;• Implementingmasscommutingandrelatedfacilitiesthatreduce
energyconsumptionandpollution;• Designing/runningdemonstrationprojectstopromotethe
commercializationofenergy-relatedtechnologiesandprocesses;and,• Implementingpubliceducationcampaignstopromoteenergy
efficiency.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE97
TheTreasuryDepartmentpublishedNotice2012-44and2012-28IRB45in2012toclarifycertaineligibleactivities:http://www.irs.gov/pub/irs-drop/n-12-44.pdf
FORMOREINFORMATION
ProgramContactZoranStojanovichU.S.DepartmentofTreasuryPhone:(202)622-3980Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE98
• CleanWaterStateRevolvingFund
� CWSRFCaseStudy
• DrinkingWaterStateRevolvingFund
� DWSRFCaseStudy
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESENVIRONMENTALPROTECTIONAGENCY
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE99
EPACleanWaterStateRevolvingFund
DESCRIPTION
CleanWaterStateRevolvingFund(CWSRF)programssupportwaterqualityprotectionprojectsforwastewatertreatment,nonpointsourcepollutioncontrol,andwatershedandestuarymanagement.ThroughtheCWSRFprogram,eachstateandPuertoRicomaintainrevolvingloanfundstoprovideindependentandpermanentsourcesoflow-costfinancingforawiderangeofwaterqualityinfrastructureprojects.FundstoestablishorcapitalizetheCWSRFprogramsareprovidedthroughfederalgovernmentgrantsandstatematchingfunds(equalto20percentoffederalgovernmentgrants).Today,all50statesandPuertoRicoareoperatingsuccessfulCWSRFprograms.CWSRFprogramsoperatemuchlikeenvironmentalinfrastructurebanksthatarecapitalizedwithfederalandstatecontributions.CWSRFmoniesareloanedtocommunitiesandloanrepaymentsarerecycledbackintotheprogramtofundadditionalwaterqualityprotectionprojects.Therevolvingnatureoftheseprogramsprovidesforanongoingfundingsourcethatwilllastfarintothefuture.Keyfeaturesoftheprograminclude:
• LowInterestRates,FlexibleTermsNationally,interestratesforCWSRFloansaverage1.7percent,comparedtomarketratesthataverage3.8percent.ForaCWSRFprogramofferingthisrateona30-yearloan,aCWSRFfundedprojectwouldcost24percentlessthanprojectsfundedatthemarketrate.CWSRFscanfund100percentoftheprojectcostandprovideflexiblerepaymenttermsupto30years.
• AssistancetoaVarietyofBorrowersTheCWSRFprogramhasassistedarangeofborrowersincludingmunicipalities,communitiesofallsizes,farmers,homeowners,conservationdistricts,andnon-profitorganizations.
• PartnershipswithOtherFundingSourcesCWSRFspartnerwithbanks,non-profits,localgovernments,andotherfederalandstateagenciestoprovidethebestwaterqualityfinancingsourcefortheircommunities.
• AdditionalSubsidyInrecentyears,aportionofeachstate’sCWSRFfederalcapitalizationgranthasbeenprovidedintheformofprincipalforgiveness,grants,ornegativeinterestloans.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE101
• GreenProjectReserveInrecentyears,totheextenteligibleprojectsareavailable,aportionofeachstate’sfederalcapitalizationgranthasbeenprovidedtogreeninfrastructure,energyefficiency,waterefficiency,andotherenvironmentallyinnovativeprojects.
ELIGIBLEACTIVITIESANDINVESTMENTS
UndertheCWSRF,stateshaveawiderangeofoptions.Statesmaychoosefromavarietyofassistanceoptions,includingloans,refinancing,purchasing,orguaranteeinglocaldebtandpurchasingbondinsurance.Statescanalsosetspecificloanterms,includinginterestrates—fromzeropercenttomarketrate—andrepaymentperiodsupto30years.Stateshavetheflexibilitytotargetresourcestotheirparticularenvironmentalneeds,includingcontaminatedrunofffromurbanandagriculturalareas,wetlandsrestoration,groundwaterprotection,brownfieldsremediation,estuarymanagement,andwastewatertreatment.TheCWSRFprogramhasthreebroadprojecteligibilities:publiclyownedwastewatertreatmentworksdefinedinSection212oftheCleanWaterAct(CWA),publiclyorprivatelyownedprojectsthatimplementnonpointsourcemanagementprogramsestablishedunderSection319,andthedevelopmentandimplementationofanestuaryconservationandmanagementplanunderSection320oftheCWA.Underthesebroadeligibilities,stateshaveagreatdealofflexibilitytofundawiderangeofwaterqualityprojects.Statesmayalsocustomizeloantermstomeettheneedsofsmallanddisadvantagedcommunities.In2015,64percentofallloans(20percentoffunding)wentforprojectsservingpopulationsoflessthan10,000.Inaddition,somestatesprovidespecializedassistanceforcommunitiesthataredisadvantagedorexperiencingfinancialhardship.Thesestatesmightofferlowerorno-interestloans,principalforgiveness,orgrantstoprovidegreatersubsidiesfordisadvantagedcommunities.
FORMOREINFORMATION
Moreinformationcanbefoundonlineat:http://www.epa.gov/cwsrfCleanWaterStateRevolvingFundRegionalandStateContactshttp://water.epa.gov/grants_funding/cwsrf/contacts.cfmProgramContactGeorgeAmesU.S.EnvironmentalProtectionAgencyPhone:(202)564-0661Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE102
EPACWSRFCaseStudy
CWSRFCASESTUDY:StruthersWaterPollutionControlFacility
PowersUpwithMethaneGas
TheCityofStruthersreceived$5.4millioninAmericanRecoveryandReinvestmentAct(ARRA)fundingfromtheOhioEnvironmentalProtectionAgency’sCleanWaterStateRevolvingFundprogramforaprojectthatwillusemethanegasproducedattheStruthersWaterPollutionControlFacilitytopowerunittreatmentprocessesandsignificantlyoffsetthefacility’senergyfootprint.TheprojectreceivedARRAGreenProjectReserve(GPR)fundingundertheEnergyEfficiencycategory,andtheentireamountofloanprincipalwillbeforgiven.TheStruthersWaterPollutionControlFacilityservesapopulationofover25,000peopleinthecitiesofStruthersandPolandandportionsofBoardmanTownship,andtreatsanaverageof4.5milliongallonsofwastewaterperday.Anaerobicdigestiongeneratesapproximately94.9thousandcubicfeetofmethanegasperdayasaby-productofthetreatmentprocess,someofwhichwasalreadybeingusedtogeneratetheheatrequiredforthesludgetreatmentprocess,offsettingsomeofitsnaturalgasconsumption.However,theexcessmethanewasbeingflaredoffintotheatmosphere.TheARRA-fundedprojectallowsStrutherstomakeuseofthisenergysourcetoprovidepowerforthetreatmentfacility’soperationsthroughtheimplementationofacombinedheatandpower(CHP)system.TheCityofStrutherstookadvantageofARRAfundingtocapitalizeontheopportunitytosignificantlyreduceitsenergyfootprintandrealizesubstantialoperatingcostsavings.TheprojectisanticipatedtosaveStruthersandnearbyMahoningCounty,whichsubsidizes64.5percentofthecostoftreatingflowsfromunincorporatedareas,about$17,000permonthinelectricitycostsand$9,000permonthinnaturalgascosts–over$300,000inannualenergycostsavings.Atthesametime,thefacility’scarbonfootprintwillbesignificantreduced.Methaneisapotentgreenhousegascapableoftrapping20timesmoreheatintheatmospherethancarbondioxide,whichmakesCHPtechnologyanattractiveenergyoptionforwastewatertreatmentfacilitiesasitextractsmethanegasoutofwaste,keepingitoutoftheopenairenvironment.Theenergythatitproducesisconsideredcarbonneutral.ACHPsystemcanproducegreenpoweratcostsbelowtheretailmarketrateandenhancethereliabilityofafacility’spowersource.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE103
ARRAfundswereusedtoconstructafilteredmethanecogenerationsystemdesignedtocaptureandutilizetheexcessmethanegastogenerateelectricityandheatforthetreatmentfacility.Thisprojectincorporatestwo500kWmethanegasgeneratorsthatwillbesufficienttosupplybetween60to70percentofthetreatmentfacility’spowerdemand.Asludgethickenerandupgradestothegascompressorwillmakeadditionalmethanegasavailableforconversion.Twobuildingswereconstructedtohousethemethanegasgeneratorsandthesludgethickener.Struthers’utilitymanagershopetoeventuallypower100percentofthefacilitywithCHPtechnology.Inall,thisprojectwillincreasethevolumeofvolatilesolidsdestructionbyatleast30percent,andthetotalamountofmethanethatwillbecapturedwillbesufficienttogenerateapproximately1000kWhofelectricityperday.AtagroundbreakingceremonyheldonJune4,2010fortheStruthersWaterPollutionControlFacilityCHPproject,CountyCommissionerAnthonyTraficanticommented,“Thisprojectsavesthecountyandcityhundredsofthousandsofdollarsinoperating,maintenance,andutilitycosts.”Indeed,thefinancialassistanceaffordedtothecityofStruthersthroughARRAhasnotonlyprovidedafinancialbenefit,butitcreatedbetween30and40jobs,andsetaprecedentforothergreenprojectsinthefutureinStruthers.FormoreinformationpleasecontacttheOhioWaterPollutionControlLoanFundProgram:http://www.epa.ohio.gov/defa/wpclf_new.aspx
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE104
EPADrinkingWaterStateRevolvingFund
DESCRIPTION
DrinkingWaterStateRevolvingFund(DWSRF)programssupportthemosturgentdrinkingwater-relatedpublichealthneedsfromsourcetotap,focusingonprojectsthatprovidecommunitieswiththegreatestpublichealthimprovement.Theprogramalsoemphasizesprovidingfundstosmallanddisadvantagedcommunitiesandtoprogramsthatencouragepollutionpreventionasatoolforensuringsafedrinkingwater.ThroughtheDWSRFprogram,eachstateandPuertoRicomaintainrevolvingloanfundstoprovideindependentandpermanentsourcesoflow-costfinancingforawiderangeofpublichealthprotectionprojects.FundstoestablishorcapitalizetheDWSRFprogramsareprovidedthroughfederalgovernmentgrantsandstatematchingfunds(equalto20percentoffederalgovernmentgrants).Today,all50statesandPuertoRicoareoperatingsuccessfulDWSRFprograms.DWSRFprogramsoperatemuchlikeenvironmentalinfrastructurebanksthatarecapitalizedwithfederalandstatecontributions.DWSRFmoniesareloanedtocommunitiesandloanrepaymentsarerecycledbackintotheprogramtofundadditionalpublichealthprotectionprojects.Therevolvingnatureoftheseprogramsprovidesforanongoingfundingsourcethatwilllastfarintothefuture.Keyfeaturesoftheprograminclude:
• LowInterestRates,FlexibleTermsDWSRFprogramssubsidizeprojectstoimproveaffordabilityforborrowers.Manyborrowersreceiveloanswithinterestratesbelowmarketrates,someaslowaszeropercent.In2015,theDWSRFofferedanaverageinterestrateof1.7percentversusthemarketrateof3.8percent.DWSRFprogramscanfund100percentoftheplanningdesign,andconstructioncostandprovideflexiblerepaymenttermsupto30yearsfordisadvantagedcommunities.
• OptionalSet-Asides
UniquetotheDWSRF,statescansetasideaportionoftheircapitalizationgrants(upto31percent)tosupportactivitiesthatarenecessarytoensuretheavailabilityofsafeandaffordabledrinkingwater.ActivitiescanincludeassistingwatersystemsthatareapplyingforDWSRFloans,strengtheningandsustainingstatedrinkingwaterprograms,improvingsourcewaterprotection,providingdirecttechnicalassistancetosmallwatersystems,andevenconductingwaterandenergyefficiencyaudits.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE105
• TransferAuthorityAstatemaytransferanamountequalto33percentoftheDWSRFcapitalizationgrantbetweentheCWSRFtotheDWSRFprograms.
• AdditionalSubsidyInrecentyears,aportionofeachstate’sDWSRFfederalcapitalizationgranthasbeenprovidedintheformofprincipalforgiveness,grants,ornegativeinterestloans.
• GreenProjectReserve(GPR)Inrecentyears,totheextenteligibleprojectsareavailable,aportionofeachstate’sfederalcapitalizationgranthasbeenprovidedtowaterefficiency,energyefficiency,greeninfrastructure,andotherenvironmentallyinnovativeprojects.Currently,fundingtheGPRisdiscretionaryfortheDWSRFprograms.Projectstypicallyincludeenergyefficiencyupgradesandwaterlossreduction.
ELIGIBLEACTIVITIESANDINVESTMENTS
UndertheDWSRF,stateshaveawiderangeofoptions.Statesmaychoosefromavarietyofassistanceoptions,includingloans,refinancing,purchasing,orguaranteeinglocaldebtandpurchasingbondinsurance.Statescanalsosetspecificloanterms,includinginterestrates—fromzeropercenttomarketrate—andrepaymentperiodsupto30yearsfordisadvantagedcommunities.Stateshavetheflexibilitytotargetresourcestotheirparticularpublichealthneedswithinthreebroadprojectpriorities:publichealthprotection;compliancewithdrinkingwaterstandards;andaffordableaccesstodrinkingwater.EachstatepreparesanIntendedUsePlan(IUP)initsannualapplicationforacapitalizationgrant.IntheIUP,thestatewilllistallthepotentialprojectstheyplantofund,andranktheminpriorityorderthroughascoringsystemthattheydevelopbasedonthethreebroadprogrameligibilities.Bypassproceduresarealsoputinplaceforthoseprojectsnotreadytoproceedtoconstruction.Stateshaveagoalofproviding15percentofthefundtosmallsystems.In2015,71percentofallloans(30percentoffunding)weremadetocommunitieswithpopulationslessthan10,001.Inaddition,somestatesprovidespecializedassistanceforcommunitiesthataredisadvantagedorexperiencefinancialhardship.Thesestatesmightofferlowerorno-interestloans,principalforgiveness,orgrantstoprovidegreatersubsidiesfordisadvantagedcommunities,aswellas30yearloanterms.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE106
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:www.epa.gov/drinkingwatersrfDrinkingWaterStateRevolvingFundProgramOperationsManual:http://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P1007ZKN.txtProgramContactNickChamberlain,ActingDWSRFTeamLeadU.S.EnvironmentalProtectionAgencyPhone:(202)564-1871Email:[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE107
EPADWSRFCaseStudy
DWSRFCASESTUDY:DrinkingWaterStateRevolvingFund
“ProtectingthePlanetandPocketbook”
TwoEPA-fundedprojectsataWilmington,Delawarewaterfiltrationplantarereducingtheequivalentof71carsworthofgreenhousegases,generatingnearly500,000kWhinannualenergysavingsandcuttingcostsby$876,000ayear.TheprojectswerefundedthroughtheDelawareDepartmentofHealthandSocialServiceswithnearly$9millioninlow-interestloansfromEPA’sDrinkingWaterStateRevolvingFund,halfofwhichdidnotrequirerepayment.TheimprovementsatthePorterStreetWaterFiltrationPlantincludetheinstallationofrowsofsolarpanelsandtheplacementofanewpumpstationtoreducecostsassociatedwithdrawingrawwaterforprocessing.Thesolarpanels,orphotovoltaicarrays,providepowerthroughtheplant’selectricaldistributionnetwork.Thegreenenergycutsgreenhousegasesbyalmost400metrictonseachyearandgeneratesanaverageof$116,368inannualsavingsthroughreducedelectriccostsandthesaleofsolarcredits.Thenew“lowhead”pumpstationallowstheplanttodrawafullcomplementofwater–notjustthetopfourmilliongallons–fromitsonsite36milliongallonrawwaterreservoir.Whenitcouldonlyskimthetoplayer,theplantwasforcedtocontinuallypumpwatertothereservoirfromtheBrandywineRiverduringtheday–whenelectricratesarethehighest–tokeepupwithdrinkingwaterdemand.Theprojectsdemonstratehowacommunitycanmakeadifferencewithbothoffsettingitsgreenhousegasemissionsandreducingratepayercosts.InaMarch2016analysisofthetwoprojects,theKashSrinivasanGroupreportedthat,“theresultstodatehavemettheoperationalandfinancialperformanceexpectations.”
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE108
• 7(A)LoanProgram
• 504LoanProgram
• SmallBusinessInvestmentCompany
� SBACaseStudy
FEDERAL F INANCINGPROGRAMS FOR CLEANENERGY
UNITEDSTATESSMALLBUSINESSADMINISTRATION
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE109
SBA7(A)LoanProgram
DESCRIPTION
SBA’s7(a)loanguarantyprogramisnamedafterSection7(a)oftheSmallBusinessActof1953,whichauthorizesSBAtoprovidebusinessloanstoAmericansmallbusinesses.Proceedsfrom7(a)loansmaygenerallybeusedtoestablishanewbusinessortoassistintheoperation,acquisition,orexpansionofanexistingbusiness.Specificusesincludetheacquisitionofland(bypurchaseorlease);siteimprovements;thepurchase,conversion,expansion,orrenovationofoneormoreexistingbuildings;theconstructionofoneormorenewbuildings;theacquisitionorinstallationoffixedassets;topurchaseinventory,supplies,andrawmaterials;tofinanceworkingcapital;andtorefinancecertainoutstandingdebts.
ELIGIBLEACTIVITIESANDINVESTMENTS
SBAgenerallydoesnotspecifywhatbusinessesareeligible.Rather,theagencyoutlineswhatbusinessesarenoteligible.However,therearesomeuniversallyapplicablerequirements.Tobeeligibleforassistance,businessesmust:
• Operateforprofit;• Besmall,asdefinedbySBA;• Beengagedin,orproposetodobusinessin,theUnitedStatesorits
possessions;• Havereasonableinvestedequity;• Usealternativefinancialresources,includingpersonalassets,before
seekingfinancialassistance;• Beabletodemonstrateaneedfortheloanproceeds;• Usethefundsforasoundbusinesspurpose;and,• NotbedelinquentonanyexistingdebtobligationstotheU.S.
government.Ifyouareawardeda7(a)loan,youcanusetheloanproceedstohelpfinancealargevarietyofbusinesspurposes.However,thereareafewrestrictions.Forexample,proceedscan’tbeusedtobuyanassettoholdforitspotentialincreasedvalueortoreimburseanownerforthemoneytheypreviouslyputintotheirbusiness.Basicusesfor7(a)loanproceedsinclude:
• Toprovidelong-termworkingcapitaltousetopayoperationalexpenses,accountspayableand/ortopurchaseinventory;
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE111
• Short-termworkingcapitalneeds,includingseasonalfinancing,contractperformance,constructionfinancingandexporting;
• Revolvingfundsbasedonthevalueofexistinginventoryandreceivables,underspecialconditions;
• Topurchaseequipment,machinery,furniture,fixtures,suppliesormaterials;
• Topurchaserealestate,includinglandandbuildings;• Toconstructanewbuildingorrenovateanexistingbuilding;• Toestablishanewbusinessorassistintheacquisition,operationor
expansionofanexistingbusiness;and,• Torefinanceexistingbusinessdebt,undercertainconditions.
SBAloanscannotbeusedforthesepurposes:
• TorefinanceexistingdebtwherethelenderisinapositiontosustainalossandSBAwouldtakeoverthatlossthroughrefinancing;
• Toaffectapartialchangeofbusinessownershiporachangethatwillnotbenefitthebusiness;
• Topermitthereimbursementoffundsowedtoanyowner,includinganyequityinjectionorinjectionofcapitaltocontinuethebusinessuntiltheSBA-backedloanisdisbursed;
• Torepaydelinquentstateorfederalwithholdingtaxesorotherfundsthatshouldbeheldintrustorescrow;or,
• ForapurposethatisnotconsideredtobeasoundbusinesspurposeasdeterminedbySBA.
Ifyouareunsurewhetherornotyouranticipateduseoffundsisallowed,checkwithyourSBA-approvedlender:QualifiedSBALendershttp://www.sba.gov/category/lender-navigation/search-sba-lenders?select=proximity
FORMOREINFORMATION
Moreinformationcanbefoundonlineat:http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/sba-loan-programs/7a-loan-programProgramContactDiannaSeabornChief,7(A)LoanProgram,[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE112
SBA504LoanProgram
DESCRIPTION
TheCertifiedDevelopmentCompany(CDC)/504LoanProgramprovidesfinancingformajorfixedassetssuchasequipmentorrealestate.Itcanbeusedtofinanceconstructionofnewfacilitiesortomodernize,renovate,orconvertexistingfacilities.Energyefficiencyupgradestobuildingsormanufacturingfacilitiesareeligibleprojects.
ELIGIBLEACTIVITIESANDINVESTMENTS
TobeconsideredforaCDC/504loanapplicantsmustmeetcertaineligibilityrequirements.Applicantsmust:
• Operateasafor-profitcompany;• Dobusiness(orproposeto)intheUnitedStatesoritspossessions;• Haveatangiblenetworthlessthan$15millionandanaveragenet
incomelessthan$5.0millionaftertaxesfortheprecedingtwoyears;• Notengageinspeculationorinvestmentinrentalrealestate;• Beaneligibletypeofbusiness(seehttp://www.sba.gov/content/sba-
financial-assistance-eligibilityforeligibilitydescriptions);• Useproceedsforanapprovedpurpose(see
http://www.sba.gov/content/sba-financial-assistance-eligibilityforapprovedpurposes);
• Nothavefundsavailablefromothersources(SBAdoesnotextendfinancialassistancetobusinesseswhenthefinancialstrengthoftheindividualownersorthecompanyitselfissufficienttoprovideallorpartofthefinancing);
• Beabletorepaytheloanontimefromtheprojectedoperatingcashflowofthebusiness;
• Meetcharacterrequirements,baseduponresponsestoa"StatementofPersonalHistory"fromtheprincipalsofeachapplicantfirm,whichismeanttogatherinformationconcerninghistoricalwillingnessandabilitytopaydebtsandtoabidebythelawsoftheircommunity;
• Haverelevantmanagementexpertise;and,• Presentafeasiblebusinessplan.
A504loancanbeusedfor:
• Theconstructionofnewfacilitiesormodernizing,renovatingorconvertingexistingfacilities;
• Thepurchaseoflong-termmachineryandequipment;
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE113
• Thepurchaseofland,includingexistingbuildings;• Thepurchaseofimprovements,includinggrading,street
improvements,utilities,parkinglotsandlandscaping;or• Limiteddebtrefinancing.
A504loancannotbeusedfor:
• Workingcapitalorinventory;or• Speculationorinvestmentinrentalrealestate.
FORMOREINFORMATION
Moreinformationcanbefoundonlineat:http://www.sba.gov/category/navigation-structure/loans-grants/small-business-loans/sba-loan-programs/real-estate-and-eqProgramContactLindaReillyChief,[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE114
SBASmallBusinessInvestmentCompany
DESCRIPTION
TheSmallBusinessInvestmentCompany(SBIC)ProgramisoneofmanyfinancialassistanceprogramsavailablethroughtheSBA.ThestructureoftheprogramisuniqueinthatSBICsareprivatelyownedandmanagedinvestmentfunds,licensedandregulatedbySBA,thatusetheirowncapitalplusfundsborrowedwithanSBAguaranteetomakeequityanddebtinvestmentsinqualifyingsmallbusinesses.TheSBAdoesnotinvestdirectlyintosmallbusinessthroughtheSBICProgram.Thereareover300licensedSBICsinoperationtoday.SBICspursueinvestmentsinabroadrangeofindustriesandgeographies.SomeSBICsinvestinaparticularfieldorindustryinwhichtheirmanagementhasexpertise,whileothersinvestmoregenerally.TheSBICprogramcurrentlyoffersitslicenseesaccesstodebtcapitalwithaten-yearmaturityandsemi-annualinterestpayments.ThestructureofthisfinancingmeansthatmostSBICsfocusprimarilyonprovidingsmallbusinesseswithdebtordebtwithequityfeatures.SBICswilltypicallyfocusoncompaniesthatarematureenoughtomakecurrentinterestpaymentsontheinvestmentsothat,inturn,theSBICcanmeetitsinterestobligationstotheSBA.
ELIGIBLEACTIVITIESANDINVESTMENTS
OnlycompaniesdefinedbySBAas“small”areeligibleforSBICfinancing.Generally,theSBICProgramdefinesacompanyas“small”whenitsnetworthis$19.5millionorlessanditsaverageaftertaxnetincomeforthepriortwoyearsdoesnotexceed$6.5million.Allofthecompany’ssubsidiaries,parentcompaniesandaffiliatesareconsideredindeterminingthesizestandardandforcertainindustriesalternativesizestandardsmayapply.DetailsregardingregulatorysizelimitationsareincludedintheSmallBusinessSizeRegulations,whichcanbefoundonlineat:http://www.sba.gov/content/small-business-size-regulations.SBICsmaynotinvestin:otherSBICs,financeandinvestmentcompaniesorfinance-typeleasingcompanies,unimprovedrealestate,companieswithlessthan51percentoftheirassetsandemployeesintheUnitedStates,passiveorcasualbusinesses(thosenotengagedinaregularandcontinuousbusinessoperation);companieswhichwillusetheproceedstoacquirefarmland;orsmallconcernswhoseprimarybusinessactivityisdeemedcontrarytothepublicinterest.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE115
FORMOREINFORMATIONMoreinformationcanbefoundonlineat:http://www.sba.gov/sites/default/files/Program%20Overview%20-%20FY%202013_0.pdfSmallBusinessInvestmentCompanyDirectory:http://www.sba.gov/content/all-sbic-licensees-stateProgramContactSamuelJ.Boyd,Jr.ChiefInvestmentOfficer&DirectorofProgramDevelopmentOfficeofInvestmentandInnovation|[email protected]
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE116
SBACaseStudy
SBACASESTUDY:DenverSmallBusinessUtilizesCertified
DevelopmentCompany(CDC)/504LoanProgramtoFinanceanEnergyEfficientNewCorporateOffice
InSeptember2013RockyMountainExcavating,Inc.(RME)utilizedtheSBACDC/504LoanprogramtofinanceitsexpansionintoanewenergyefficientbuildinginCastleRock,CO.RMEisaservice-disabled-veteran-ownedsmallbusiness(SDVOSB)andcertified8(a)company,thatprovidesgeneralcontracting,constructionmanagement,anddesign-buildservicesthroughoutColorado,NewMexico,Wyoming,andtheentireRockyMountainregion.CommunityEconomicDevelopmentCompanyofColorado(CEDCO)wastheCDCthathelpedRMEfinancethisproject.CDCsarenon-profitcorporationscertifiedandregulatedbytheSBAthatworkwithparticipatinglenderstoprovidefinancingtosmallbusinesses.TheprojectwasfinancedbyVectraBankColorado.RME’sconstructioncostswereslightlyhigherthanatraditionallybuiltbuilding,buttheyexpecttorecoverthecostoftheirenergyefficiencyimprovementsbysavingover20percentonenergycostscomparedtosimilarfacilities.SomeexamplesofenergyefficiencyandsustainabilitymeasuresRMEutilizedinclude:
• Additionalinteriorandexteriorinsulation;• EnergyefficientLow-Ewindowsandwindowfilms;• Heatresistantwindowshades;• Lightingandcontrolsstrategiesdesignedwithenergyefficiencyin
mind;• EnergyefficientHVACequipment;• Recycledmaterials,includingasphaltandconcrete;and,• Maintenanceshopheatedbyasecondaryhigh-efficiencyrecycledoil
unitthatissoefficientthemainheateralmostneverruns.The504LoanthatRMEutilizedisanSBAfinancingprogramestablishedtotargetcompaniesintheirgrowthcycletocreatejobs,expandthetaxbase,andimproveAmericancommunities.504Loansprovidelong-termfixedassetfinancingtosmallbusinessesforthepurchaseorimprovementofland,buildings,andmajorequipmentpurchases,inanefforttofacilitatethecreationofjobsandlocaleconomicdevelopment.
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE117
A504loancanbeusedfor:
• Thepurchaseofland,includingexistingbuildings;• Thepurchaseofimprovements,includinggrading,street
improvements,utilities,parkinglotsandlandscaping;• Theconstructionofnewfacilitiesormodernizing,renovatingor
convertingexistingfacilities;and• Thepurchaseoflong-termmachineryandequipment.
SBAandDOEarecurrentlycollaboratingonaprojectwithArgonneNationalLaboratoryandtheNationalRenewableEnergyLaboratorytohelpsmallbusinessesmoreeffectivelyutilizeSBALoanProgramsforenergyefficiencyprojects.Formoreinformation:LindaReillyChief,504LoanProgram202-205-9949linda.reilly@sba.govFormoreinformationaboututilizingSBA’s504LoanProgramforenergyefficiency,pleasevisityourlocalSBADistrictOfficeat:http://www.sba.gov/tools/local-assistance/districtofficesorSmallBusinessDevelopmentCenterathttp://www.sba.gov/tools/local-assistance/sbdc
FEDERALFINANCINGPROGRAMSFORCLEANENERGY•2016|PAGE118
DOE1
6-00
8-LP
O-F
INGUID
E
FEDERAL FINANCING PROGRAMSfor
CLEAN ENERGY2016
energy.gov/finance