How USDA Loans Can Promote Energy Independence and Sustainability in the U.S.

Government-guaranteed financing can indeed play a crucial role in pushing U.S. energy independence and sustainability. The United States Department of Agriculture (USDA) offers various loan programs aimed at helping to fortify and promote a more sustainable future rural communities and businesses, while also promoting renewables technology and greener energy.

These programs enable credit and lending organizations to arrange packages of capital for companies and projects that typically wouldn’t have access to traditional financing that meets their needs, time horizons, and cost parameters.

One example of a business taking advantage of these loan programs to promote sustainability-oriented technology is Aemetis, an advanced renewable fuel and biochemical company. They turned to Greater Commercial Lending to coordinate a $25 million loan through the USDA Rural Energy for America Program (REAP) to help develop and build dairy biogas digesters (systems that help decompose organic matter into renewable fuels) and a biogas pipeline in Stanislaus County, California. When fully built, the project will reduce greenhouse gas emissions equivalent to an estimated 6.8 million metric tons of carbon dioxide over 10 years, equal to removing the emissions from approximately 150,000 cars per year.

Another example is New Rise Renewables Reno, which recently utilized $112.6 million in USDA-guaranteed loans, arranged by GCL, to build and launch a revolutionary renewable diesel plant in Reno, Nevada. Once fully operational, the plant is projected to save nearly 880 million pounds of carbon emissions, the equivalent of removing 88,000 vehicles from the roads.

These projects —and scores of other ones around the country— create obvious environmental and economic development benefits.

USDA loans for renewable energy projects are not just catalysts for rural communities; they also support the broader U.S. economy. Renewable energy projects create jobs in construction, installation, and maintenance, boosting local economies. Additionally, renewable energy projects help to reduce the U.S. dependence on foreign oil, which can improve national security.

Despite the benefits of renewable energy projects, many rural businesses and communities are hesitant to invest in these technologies due to the high upfront costs. The USDA loans for renewable energy projects overcome this barrier, making it easier for innovation and for rural communities to transition to cleaner, more sustainable energy sources.

It’s fair to say that USDA guarantee programs can be vital in getting new and innovative projects built as they provide a massive amount of opportunity for a variety of businesses. The programs make all the difference in creating transformative credit packages because they provide a way to finance enterprises that don’t fit into traditional loan categories or rely too heavily on private equity.

So, while we pursue renewables, sustainability, and the revitalization of underserved areas, we should make sure to investigate and educate ourselves on what government-guaranteed lending programs can make possible and how to maximize them for the benefit of businesses and society.

If you’re interested in reading more, please reference GCL executive vice president Jeremy Gilpin’s Forbes article through the link below.