Apply Now For USDA Rural Energy Program

USDA Rural Development Agency has a Loan & Grant Program that aims to increase the number of blender pumps for biofuels in Iowa.

Published on: May 26, 2011

Statewide gas prices are approaching $4 per gallon for regular gasoline, up more than $1 per gallon from just one year ago, according to Minnesota/Iowa AAA, which conducts the weekly survey. Meanwhile, a loan and grant program from USDA Rural Development is seeking to add to the number of flexible fuel pumps, sometimes called "blender pumps" in Iowa, giving consumers the choice of filling their vehicles with higher blends of lower-cost ethanol.

Applications for this year's Rural Energy for America Program administered by USDA Rural Development are due June 15. "Iowa is already a leader in the country when it comes to biofuels, but we still have a relatively limited number of pumps that put out anything more than E-10," says Bill Menner, USDA Rural Development state director in Iowa. "We have a potential great demand for the E-15 and E-85 ethanol blends; we just need more service stations and retail fuel facilities that can offer them."

USDA has funding for $61 million in loans, $42 million in grants

This year USDA is providing funding for up to $61 million in guaranteed loans and $42 million in grants through REAP, a national program. Funds are available to help agricultural producers and rural small businesses develop renewable energy systems, make energy efficiency improvements and conduct studies to determine the feasibility of renewable energy systems.

A recently issued rule clarifies the definition of renewable energy systems to include blender pumps. This clarification is intended to provide fuel station owners with incentives to install blender pumps that will offer Americans more renewable energy options. The Obama Administration has set a goal of installing 10,000 flexible fuel pumps nationwide within five years.

REAP offers grants up to 25% of a project's eligible costs. Guaranteed loans, and a combination guaranteed loan and grant, can be as much as 75% of total eligible costs. However, any purchases incurred prior to submitting a complete application are not eligible.

Effort being made to work together with groups, for biofuel industry

"USDA is working hand-in-hand with local partners and entrepreneurs to build the biofuels industry in the United States to create thousands of jobs growing and harvesting biomass, building and operating refineries, and transporting biofuel to market," Menner adds.

USDA Rural Development is an equal opportunity lender with a variety of direct and guaranteed rural credit programs involving single and multi-family housing, community facilities, water and sewer development and business and cooperative programs. For more information about finance programs through USDA, call (515) 284-4663 or visit www.rurdev.usda.gov/ia.

USDA Rural Development has 11 offices across the state to serve the 1.7 million Iowans living in rural areas and communities.  Office locations include a State Office in Des Moines, along with Area Offices in Albia, Atlantic, Humboldt, Indianola, Iowa Falls, Le Mars, Mount Pleasant, Storm Lake, Tipton and Waverly.