WASHINGTON, D.C. — Ten billion dollars will soon be available to assist in infrastructure projects in rural America.
The White House Rural Council, the USDA and CoBank announced the creation of the U.S. Rural Infrastructure Opportunity Fund through which private entities can invest in job-creating rural infrastructure projects across the country. CoBank pledged the initial $10 billion for loans.
"This fund represents a new approach to our support for job-creating projects across the country," said Tom Vilsack, USDA secretary and chair of the White House Rural Council.
The purpose of the fund is to connect similar projects together to make the projects more appealing for financing, and then finance the work needed.
For example, rural communities have difficulty getting financing for broadband networks individually, but if projects from several counties are connected, the projects can be bundled into one project.
Costs for the group project should be decreased while financing should be easier to obtain because the investments are solid. "Ten billion sounds like a lot of money … but the needs are much bigger," said CoBank CEO Bob Engel. He hopes other investors will participate in the fund.
Vilsack said the USDA has 18,000 wastewater projects waiting to be funded. Individually, the projects are not worth the time and resources to investors, but if bundled, investors become interested.
"The default rate (on USDA projects) is less than a couple of percent," Vilsack said. "Partnerships allow us to leverage resources more successfully." He said the projects have the potential to create 30,000 jobs in construction.
The fund has flexibility, he added. Projects can be submitted through channels already used, such as local rural development directors, and bundled by the USDA or the state, or several rural development directors working together. "There is a tremendous amount of money in the economy. Let’s use it," Vilsack said. "We’re not going to sit on these things."
He said the goal of the program is to get the projects funded as quickly, with as few obstacles as possible. Projects that are eligible for financing from the fund include hospital, school, rural water and wastewater systems, energy projects, broadband expansion and other rural infrastructure needs. Projects may be funded entirely through private sector dollars. In other projects, private funds and government loans and grants may be used together.
Vilsack said continued rural investment is needed in the United States.
"Many major investors in urban centers aren’t always aware of the significant investment opportunities in rural communities. If the White House Rural Council can help facilitate even a small portion of (available funds) … into rural places, we can grow key industries and create jobs in rural and urban areas from coast to coast," he said.
