The U.S. Dept. of Agriculture has awarded $2.7 billion in loans and loan guarantees to 64 electric utilities and co-operatives in rural areas in 28 states for projects to expand and better secure power grids.
The agency, which announced the list of loan recipients and dollar amounts on Jan. 30, said it is gearing up for an even larger amount of energy infrastructure loans. The Inflation Reduction Act enacted last year has $369 billion in climate-related provisions, including more than $12 billion earmarked for USDA loans and grants for clean energy and rural power projects, it noted.
USDA said it will announce those new funds in "the coming months."
The $2.7 billion in loans comes from USDA's regular appropriations, a USDA Rural Development spokesperson told ENR.
Of the $2.7 billion, USDA said $613 million will assist utilities and co-ops as they install and modernize smart grid technology. Nearly half of the loans will help fund upgrades in underserved communities.
"This funding will help rural cooperatives and utilities invest in changes that make our energy more efficient, more reliable and more affordable, said Agriculture Secretary Tom Vilsack in a statement.
The USDA loans, which come from the Federal Financing Bank, have a maximum repayment term of 35 years up to the useful life of the facility involved. Guarantees and loans will have the rates set by the U.S. Treasury plus 0.125%.
One option is for hardship loans to help applicants in rural areas that are "economically distressed or recovering from an unavoidable event, such as a natural disaster," USDA said. Hardship loans have a fixed rate of 5%, with a maximum repayment term of 35 years.
The largest award is $262.8 million to Boyne, Mich.-based Great Lakes Energy Cooperative. which includes $182.8 million for smart grid projects that will involve installation of 2,420 miles of fiber backbone communications network, according to USDA.
The second-largest loan is $254.8 million to South Central Power Co. in Lancaster, Ohio, with funds to build and upgrade 320 miles of line and transmission system projects, including $94.7 million for smart grid projects to install 1,130 miles of fiber cable.
Third largest is a $225-million loan to Withlacoochee River Electric Cooperative in Dade City, Fla.; fourth is a $141.9-million award to GreyStone Power Corp., in Hiram, Ga., and fifth is $125 million to Singing River Electric Power Association in Lucedale, Miss.