USDA Area II director for Rural Development Joseph M. Diego said during last week’s workshop for small businesses that farmers, ranchers and rural small businesses that have energy projects can apply for financing capital under the Rural Energy for America or REAP program.
“REAP provides guaranteed loans or grants for renewable energy or energy efficiency projects,” Diego said.
He said this program was established in 2002 but there had been several changes in the 2007 guidelines.
The REAP program can provide funding for a combination loan/grant to as much as 75 percent of the eligible project costs.
“The funding for REAP projects has increased from $23 million in 2008 to $60 million in 2009, so there’s money for renewable energy projects,” Diego said.
But entrepreneurs who plan to venture into renewable energy businesses are required to submit a feasibility study of the proposed business.
“We want to see the numbers, we want to see if the program will really provide cost-saving measures and we want to see the pay-back forecast,” Diego said.
Eligibility
Rural small businesses and agricultural producers in the CNMI and the Western Pacific are eligible to apply for loans/grants under the REAP program.
Diego said agricultural producers are those individuals or entities who are directly engaged in the production of agricultural products including farming or ranching that gets 50 percent of their gross income from the operations.
Small businesses must meet the size standards under the Small Business Administration by the number of employees or by annual receipts. Visit www.sba.gov/size/indextableofsize.html for more details. Non-profit organizations are excluded but they can check other USDA Rural Development programs.
Types of applications
Interested businesses can apply for the different types of funding such as the simplified grant only which is less than $200,000 in total project costs, full grant only which is greater than $200,000 in total project costs, guaranteed loan less than $60,000, guaranteed loan more than $600,000, and combination guaranteed loan/grant.
Eligible projects
Diego said the eligible renewable energy or energy efficiency projects include biomass, anaerobic digester, geothermal (electric generation and direct use), hydrogen, wind, solar, and small hydro and ocean energy.
Grants for energy renewable projects can be from $2,500 to $500,000.
Eligible projects for energy efficiency include improvements to a facility, building or process that reduces energy consumption, or reduces energy consumed per square foot. Grant requests for energy efficiency can be from $1,500 to $250,000.
Diego said projects for residential use are not allowed.
The joint SBA-USDA workshop hosted by the Saipan Chamber of Commerce for small business owners at the Pacific Islands Club on June 3 also included topics on SBA Joint Venture/Mentor/Protégé Procurement Program.
Conducting the training with Diego were Kenneth Q. Lujan, Guam branch manager, U.S. Small Business Administration and Jack Corbett, business development specialist, U.S. Small Business Administration.
For more information about the REAP funding opportunities, contact Bernie Balajada or Diego at 472-7361/2/3 on Guam, or visit www.rurdev.usda.gov.
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