Distributed Energy Generation Energy Project Financing

The RUS Electric Program can provide loans and loan guarantees to energy project developers for distributed energy projects including renewables that provide wholesale or retail electricity to existing Electric Program borrowers or to rural communities served by other utilities. Electric Program project financing loans follow the same regulatory requirements and processes as do our traditional electric infrastructure loans and loan guarantees (also known as system loans or loans for rural electrification).

Distributed generation projects including generation from renewable resources are providing more power supply options for rural communities. There is growing interest among electric cooperatives to enter into power purchase agreements (PPAs) with project developers or to interconnect distributed generation projects directly into their systems.

Who may apply for financing?

• Energy project developers for distributed energy projects
• Electric Program borrowers or other utilities that serve rural areas

How may funds be used?

For project loans, there are three typical situations:

• Existing borrower (cooperative) owns and operates the project.
• A project developer builds and operates the project that has PPAs to serve rural customers such as existing RUS borrowers and/or other off-takers.
• A wholly-owned subsidiary of an existing RUS borrower owns and operates the project and has a PPA with the RUS borrower to take the entire output.