The USDA’s Office of Rural Business-Cooperative Service announced the availability of funds for fiscal year 2006 to purchase renewable energy systems and make energy efficiency improvements for agriculture producers and rural small businesses, as authorized under Title IX, of the 2002 Farm Bill.

This year’s solicitation makes $11.385 million available in competitive grant funds and approximately $176.5 million available in guaranteed loan authority.

The National Grange’s 2006 Blueprint for Rural America, Issue # 4 Achieve Energy Securities for Rural America Action Plan states, in part: “Promote biodiesel, ethanol, biomass and wind energies derived from America’s family farms.”

Applications for grants must be completed and submitted to the USDA Rural Development state office in the state where your project is located, postmarked no later than May 12, 2006. Guaranteed loans will be awarded on a continuous basis. Applications are due to the National Office for funding consideration by July 3, 2006. Any guaranteed loan funds not obligated by August 1, 2006, will be made available for competitive grants.

For more information refer to the announcement in the February 13, 2006 Federal Register or contact any state Rural Development office.

Grant amounts 

• Awards for renewable energy systems will be between $2,500 and $500,000.
• Awards for energy efficiency improvements will be between $1,500 and $250,000.
• Rural Development grants under this program will not exceed 25 percent of the eligible project costs.
• Rural Development combined grant and guaranteed loan funding packages will not exceed 50 percent of eligible project cost, with the grant portion not to exceed 25 percent of eligible project costs.

Loan Guarantee

• Maximum amount of a guaranteed loan made to a borrower will be $10 million.
• For FY 2006, the guarantee fee amount is 1.0% (one percent) of the guaranteed portion of the loan and the annual renewal fee is 0.125% (one-eighth of one percent) of the guaranteed portion of the loan.
• Rural Development guaranteed loans will not exceed 50 percent of the eligible project costs.

If you have any questions or comments please contact Legislative Research Analyst Chil-Sook Hwang by e-mail: chwang@nationalgrange.org by fax: 202-347-1091 or by phone: 1-888-4GRANGE, ext 109.

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