The Obama administration has announced the launch of a $10-billion loan fund that, initially, draws on private capital to help finance water, electric-power and other infrastructure projects in rural areas.

Agriculture Secretary Tom Vilsack told reporters in a conference call that the new U.S. Rural Infrastructure Opportunity Fund, which the White House Rural Council announced on July 24, “means that we can begin to address aggressively the infrastructure deficit that exists in the United States in the rural communities today.”

CoBank, a cooperative bank based in Greenwood Village, Colo., is the fund’s “anchor” investor, providing $10 billion in capital, said CEO Robert Engel. The fund will provide loans for rural projects in sectors such as water, wastewater treatment, electricity generation and transmission, and schools.

The White House said some projects' loans could be provided completely through private funds, but other projects could use government grants or loans to leverage private dollars.

The U.S. Dept. of Agriculture has been providing loans and grants for water, electric power, housing and other projects for many years. For example, in fiscal year 2013, USDA’s Rural Utilities Service provided $1.3 billion in direct or guaranteed loans for 755 water and wastewater projects.

But Engel said USDA “has finite resources” in money and personnel. He added, “There’s an understandable backlog of projects across many of these sectors.”

Vilsack agreed there is “significantly greater demand for credit” than the amounts the Rural Utilities Service has available. He noted, “There’s a waiting list of water and wastewater projects out in rural America that we would love to fund, but we simply don’t have the capacity to do it.”

Engel observed that, to make rural projects more attractive to major investors, one possibility would be to pool multiple small projects into large package loans.

Vilsack said other investors, including pension funds and college and university endowments, can join the fund. Capitol Peak Asset Management, which has offices in Denver and Washington, D.C., will manage the fund.

Vilsack chairs the White House Rural Council, whose members include heads of many Cabinet departments and other agencies.