Puerto Rico/USVI get $300M from USDA to advance clean energy deployment
The U.S. Department of Agriculture (USDA) has announced the availability of nearly $11 billion in grants and loan opportunities that will help rural energy and utility providers deliver more affordable and reliable clean energy to their communities through grids.
Puerto Rico and the U.S. territories will receive a $300 million allocation, Maximiliano Trujillo, director of USDA Rural Development on the island confirmed.
“This is a first-come, first-serve funding opportunity for a program that has never been carried out here, which will go toward energizing rural areas through renewable energy projects,” said Trujillo in an interview with News is my Business. “The Biden-Harris administration is paving the way for renewable energy, and local entities have a great opportunity to present good proposals.”
The funds will be available through two new programs under the Inflation Reduction Act. Specifically, the USDA will be opening a Letter of Interest process for the Empowering Rural America (“New ERA”) program, which makes $9.7 billion available to eligible rural electric cooperatives for the deployment of renewable energy systems, and zero-emission and carbon capture systems.
Loans under this program will require matching funds from the entity at a rate of 75% from the federal agency and 25% from the participant, which can be obtained from the private sector, Trujillo explained.
Rural electric cooperatives, including current and previous USDA borrowers, are eligible for funding. To apply, eligible entities must submit a Letter of Interest between July 31 and Aug. 31.
In addition to New ERA, the USDA will also be opening a Letter of Interest process for the Powering Affordable Clean Energy (PACE) program, which makes $1 billion available in partially forgivable loans to renewable energy developers and electric service providers, including municipals, cooperatives, and investor-owned and tribal utilities to help finance large-scale solar, wind, geothermal, biomass, hydropower projects and energy storage in support of renewable energy systems.
“Puerto Rico has the opportunity to access two-thirds of that budget. Just so you have an idea, applicants can request from $1 million to $100 million for their proposed projects under PACE,” he said.
Loans through this program may be forgiven by 40% of the loan amount, and the maximum loan amount is $100 million. Applicants in Puerto Rico, the Federated States of Micronesia, the Republic of the Marshall Islands, the Republic of Palau and tribal communities are eligible for up to 60% loan forgiveness. For this program, the USDA will begin accepting Letters of Interest starting on June 30, on a rolling basis until Sept. 29.
All loans will be granted at “insignificant” loan rates of between 2% and 0%, Trujillo said.
During the interview, Trujillo stressed the importance of meeting the deadlines to submit the Letters of Intent, which will be scored and ranked. Successful proposals will get a call back during a process that could take several months — but that could be completed by year’s end, Trujillo said.
Those entities that move on to that second stage will have to submit a comprehensive proposal, that could result in financing.
