New England News
Thu July 24, 2014
USDA Creates Rural Development Investment Fund
Agriculture Secretary Tom Vilsack has announced the creation of a new U.S. Rural Infrastructure Opportunity Fund that will allow private entities to invest in rural infrastructure projects.
The White House Rural Council has created the U.S. Rural Infrastructure Opportunity Fund to enhance investment in projects such as water and wastewater systems, broadband expansion, hospitals and educational facilities, energy and regional food systems.
CoBank, a national cooperative bank that is a member of the Farm Credit System, is the anchor investor of the fund. It has committed $10 billion in hopes that the move will spur private investment in rural infrastructure projects.
USDA Secretary Tom Vilsack says that bankroll and potential for more investors means that the infrastructure deficit in rural communities can be aggressively addressed. “We know from our own investments at USDA that there are tremendous opportunities to improve water and wastewater treatment, to improve roads and bridges. To improve a series of electric projects. Opportunities to expand broadband. We also know that there are business opportunities in the bio-economy, manufacturing, local and regional food systems or creative ways to use conservation to support ecosystem markets. 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.”
Colorado-based CoBank is part of a network of banks that provides financing to agribusiness in rural areas. CEO Robert Engel. “The scale of the commitment and investment that’s going to be necessary in the coming years if we’re going to keep the rural economy vibrant and certainly world competitive is absolutely huge. Everyone in our country has a real stake in the long-term health of rural America. We have to do everything we can to facilitate the flow of capital to rural infrastructure projects.”
Creation of the Rural Infrastructure Opportunity Fund is intended to open investment opportunities for endowments, pension funds, foundations and other investors. Engel says too many investors do not see the economic potential in rural infrastructure, and this fund will seek creative ways to partner backers with projects. “The whole idea is to simplify the process and identify and match these rural infrastructure projects with the enormous amount of capital that is out there.”
Secretary Vilsack explained that the federal agriculture department will help identify projects. “A community or a project can say we are interested in participating. Would you be willing to participate and invest in our project? You would then make a loan.” CoBank CEO Robert Engel responded. “Mr. Secretary, we’ve got projects out there that need financing. Ten billion’s a nice start, but guess what, there’s a lot more out there than that. We’ve really tried to build this with a lot of flexibility. But the whole idea is to match projects with investors.”
The New York Farm Bureau was reviewing the plan, which was released Thursday, and had not yet assessed its potential impact on New York’s agriculture sector.
The new fund was announced during the White House Rural Council’s Rural Opportunity Investment conference.
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