USDA, private sector launch $10B fund to boost rural projects
USDA, CoBank and Capitol Peak Asset Management Co. have joined to create a mechanism that will provide loans to projects that boost rural infrastructure and business development.
“It means we can begin to address the infrastructure deficit that exists in rural communities today,” Vilsack said in a call with reporters yesterday.
The fund will distribute loans for water and wastewater treatment, to improve roads and bridges, to upgrade the electric grid and expand broadband Internet access, and build the biofuel and bioproducts economy, among other goals, Vilsack said.
The commitment builds on an existing $150 million rural investment fund. CoBank is a Colorado-based cooperative bank with several regional offices and is one of the largest providers of credit in rural areas of the country, according to CEO Bob Engel.
“These businesses do have substantial capital requirements, these are capital-intensive businesses,” Engel said of infrastructure and economic development projects.
USDA has struggled to help finance the large number of rural development projects with its own resources, Vilsack said.
“There’s a waiting list of water and wastewater projects out in rural America that we would love to fund, but we simply don’t have the capacity to do it,” he said.
USDA has organized a two-day conference on rural investment this week in Washington, D.C. Treasury Secretary Jack Lew highlighted the energy boom in rural areas and increased agricultural demand in rural areas.
“Rural America is deeply important to our nation and deeply important to our administration,” Lew said.
Traditionally, it has been much easier for investment firms to offer finacing in major markets, said Kendrick Wilson, vice chairman of the investment company BlackRock, who spoke at the conference this morning.
“It’s not that rural businesses don’t deserve the capital, they’re just disconnected from it,” he said.