Feds to offer $10B in rural project loans

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WASHINGTON — Developers of roads, bridges, wastewater treatment plants, health care centers and other projects in rural areas soon could have more ways to leverage capital under a new, privately funded infrastructure investment program the White House Rural Council is expected to announce today.

CoBank, a national cooperative, has already pledged to make $10 billion available in loans for rural projects, and additional investors are being recruited to add to the U.S. Rural Infrastructure Opportunity Fund, which will be controlled by Capitol Peak Asset Management.

The fund will help pension funds, endowments, foundations and other institutions to invest in rural infrastructure markets that they traditionally have not accessed.

In some cases, projects identified by the Agriculture Department could be funded entirely through private dollars. In others, private investment could be leveraged with government grants and loans.

Agriculture Secretary Tom Vilsack, who heads the Rural Council, is expected to roll out the program today during the inaugural Rural Opportunity Investment Conference in Washington.

He offered reporters a preview on a telephone conference call Wednesday.

“Now we can begin to address the infrastructure deficit that exists in rural communities today,” Mr. Vilsack said. “There are tremendous opportunities to improve water and wastewater treatment, to improve roads and bridges, to improve a series of electricity projects [and] opportunities to expand broadband. … This $10 billion fund will certainly help expand those opportunities and send a strong message that we are interested in seeing continued job growth and opportunities in rural areas.”

CoBank CEO Robert Engel, who also was on the call, said the aim is to match rural infrastructure projects with investors. Sometimes that could mean bundling projects in creative ways to spread risk.

Interest will conform to market rates based up risk of each project.

“These are loans that everybody would like to be involved in but the challenge has been making sure folks with the resources are aware of the projects. There isn’t the awareness. … They don’t know that there is a waiting list of projects that have not yet been funded,” Mr. Vilsack said.

He said there is greater demand for credit than government and traditional loans have been able to provide.

“This is a new way for us to do business. This is us connecting. This is us building a bridge. This is us educating the private sector about opportunities,” he said.

The fund is part of the Obama administration’s effort to promote investment in rural America while improving the nation’s infrastructure and growing the economy, the White House said in a statement.

The effort has included $9.9 million in federal grants for rural health care centers, a collaboration with Georgetown University to provide online courses on rural entrepreneurship, assistance to help rural businesses develop markets abroad, investments in conservation programs, development of a symposium on public-private partnerships, working to accelerate broadband access in rural areas, and more.

Washington Bureau Chief Tracie Mauriello: tmauriello@post-gazette.com, 703-996-9292 or on Twitter @pgPoliTweets.

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