USDA announces first investments in Rural Infrastructure Fund
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WASHINGTON, July 28, 2015 - Agriculture Secretary Tom Vilsack today announced the first round of investments in rural infrastructure projects through the U.S. Rural Infrastructure Opportunity Fund, which was created just over a year ago.
USDA said that through the Fund and expanded public-private partnership, the department has facilitated $161 million in private capital investments in 22 critical water and community facilities projects in 14 states, maximizing the impact of USDA's own investments in job-creating rural infrastructure projects across the country.
“The Fund and USDA's other public-private partnership efforts help to facilitate private investment in rural businesses and infrastructure projects and maximize USDA's own record investments in rural America," said Vilsack, who is also chair of the White House Rural Council.
“USDA and other agencies invest in infrastructure through a variety of federal initiatives, but our resources are finite and there are backlogs of projects in many parts of the economy,” Vilsack said in a news release. “Efforts like the Fund help encourage substantial private investment in even more projects that help to grow the rural economy and support rural communities where people want to live, work and raise their families.”
Strong, secure infrastructure-roads and bridges, but also internet access and community facilities like hospitals and schools-improves connectivity and access to information, moves products to market, and makes communities competitive and attractive to new businesses and investments.
Investments include improvements to nursing homes, constructing new preschool and day care facilities, upgrading a facility for a rural ambulance service in South Dakota, and building two new critical access hospitals in rural Illinois and North Carolina. In addition, the Fund invested in 11 critical water projects in California, Kansas, Mississippi, North Dakota, Ohio, South Carolina, South Dakota and Texas. At least 38 additional critical infrastructure projects are in the pipeline for investment by the Fund.
The U.S. Rural Infrastructure Opportunity Fund is part of a broader effort across USDA to rethink how to best leverage private sector resources to revitalize and reenergize the rural economy. Last year, Vilsack announced the creation of a $150 million privately-funded Rural Business Investment Company (RBIC), which has already made three investments in rural businesses with high-growth potential. Earlier this year, Vilsack announced the launch of two additional new privately-funded RBICs, which will be run by Innova Memphis and Meritus Kirchner Capital. Once the capital has been raised, these companies will make equity investments in rural businesses with high-growth potential. The department said efforts like the Fund and the RBICs help to maximize USDA's own portfolio of investments in rural development.
CoBank, as anchor investor, agreed to commit up to $10 billion of its balance sheet capacity to lend in conjunction with the Fund, consistent with CoBank's existing authority. AgStar Financial Services, another Farm Credit institution, also made investments in the first year. Capitol Peak Asset Management manages the Fund, has developed a strong pipeline of infrastructure related projects and investments, and is working to recruit additional investor, and is providing capital advisory services to companies in rural America. The USDA and other federal agencies are helping to identify rural projects that could be beneficiaries of financing through this new Fund and other private sources.
This announcement comes in conjunction with the second White House Rural Opportunity Investment Conference in Washington, D.C., focused on building equity capital in rural America. The conference aims to connect senior leaders from financial institutions, fixed income fund and other investors with rural business leaders, senior-level government officials, economic development experts, and program sponsors to discuss the unmet need for investments in rural America-matching investments with opportunities.
This year's conference builds on the work of the first-ever conference, held last year at the White House and focused on debt investments.
USDA says that over the past six years, it has made historic investments in every state to support the farmers, ranchers and growers who are driving the rural economy forward, carry out record conservation efforts, facilitate groundbreaking research, promote new markets for rural products, and provide a safe, affordable and nutritious food supply for American families. To see how USDA has invested in each state, visit www.usda.gov/results.