USDA business loans have helped thousands of rural businesses across the country start and scale operations while powering the growth of American industry. USDA business loans for renewable energies, farming, food production, and supply chain operations are recent focus areas for the USDA programs since they are aimed at creating jobs and modernizing rural economies for the next generation.
Hundreds of business owners have worked with West Town Bank & Trust’s Government Guaranteed Lending team to leverage USDA business loans as a springboard for their growth. How would you use a USDA business loan program for your next success?
Developers Constructed a Clean Energy Biomass Power Plant Using $34 Million in USDA Business Loans for Development Capital.
This North Carolina-based facility turns poultry biomass into power to provide clean energy derived from an underutilized waste by-product. A $34 Million financing solution supplied the company with the funds to construct its facility and become one of a select few approved plants for the state of North Carolina.
The Opportunity: New Legislation Opened the Door for Bioenergy Investments
North Carolina’s 2007 Renewable Energy and Energy Efficiency Portfolio Standard opened the door for a select group of power plants to supply major energy companies in the region with mandated clean power credits. A significant percentage of those credits are required to be generated by animal waste, specifically, from poultry waste, among others. Since the law passed, the industry has struggled to fill that required carveout for clean energy produced from biomass.
The NC REPS biomass energy requirement not only increases the use of clean energy in the state, it also helps North Carolina tackle a complicated waste disposal problem. Poultry litter is a difficult organic material for feedstock operators to dispose. New technologies have made it possible for farmers to turn this waste by-product into a source of clean, renewable energy at scale.
Technological investments in renewable energies coupled with state-led initiatives created a unique opportunity for this developer to become a definitive leader in North Carolina’s renewable energy economy.
The Challenge: Accessing Affordable Renewable Energy Development Capital for Biomass Power Plant Construction
The equipment needed to convert biomass into power requires significant startup investments. This technology includes complex machinery and needs a highly skilled team behind it to get the facility up and running.
The company needed substantial funds to construct its plant and become one of the dominant companies to fill the immediate need for clean power. Ideally, that capital would be affordable, have an extended repayment term, and would be available to use before development broke ground.
The Solution: Biomass Power Plant Financing with Growth-Friendly Terms
The dedicated Renewable Energy Financing experts at West Town Bank & Trust structured a financing package that leveraged a combination of USDA business loans programs to provide this power plant and its partners with construction capital. These loan programs enabled the company to access the financing it needed on the right terms for its planned growth.
The project was eligible for two different USDA business loan programs based on its location and how the funds would be used:
USDA Business Loan Program Utilized:
• $9.0MM – Business & Industry Program (B&I)
• $25.0MM – Rural Energy for America Program (REAP)
Total financing amounted to $34 Million over a 25-year term.
Check my Eligibility for these loan programs.>
The Result: Powerful Project Financing for Renewable Energy Development
USDA renewable energy financing went to fund a plant capable of an output of 3 MWe of gross electrical power and 75 MMBtu/hour of thermal energy using one grate-fired biomass power boiler, a steam turbine generator, a steam-to-hot water heat exchanger, and auxiliary equipment.
This financing solution of USDA business loans enabled developers to build this facility on terms that laid the foundation for their long-term growth. They are now one of a select few plants in the region to provide major energy suppliers with the required clean energy credits, resulting in a win-win for North Carolina’s local agricultural and renewable energy economics.
What would you do with affordable energy development capital?
Check your eligibility for these USDA Business Loan Programs:
