WASHINGTON, July 24, 2014 -- USDA and CoBank announced today a partnership to create a $10 billion fund to improve rural infrastructure, an investment Agriculture Secretary Tom Vilsack called both a “historic investment” and a “great first effort.”
The partnership was announced at the White House's Rural Opportunity Investment Conference, where USDA and CoBank officials sought additional funding from private entities to add to the fund.
The fund will be used to distribute loans to improve infrastructure in rural communities such as wastewater treatment, roads and bridges, rural broadband and conservation projects. Capitol Peak Asset Management Company will assist CoBank in managing the fund, and loans will be distributed and repaid with the goal of creating an ongoing fund used to improve rural infrastructure.
“These are loans that everybody would like to do and be involved in, but that challenge has been making sure that folks with the resources are aware of the projects,” Vilsack said, emphasizing the need to inform private companies and individuals of the opportunity at the investment conference. “(Investors) didn't know there was a waiting list of projects that have not yet been funded.”
Vilsack said matching USDA's knowledge of rural infrastructure needs with CoBank's ability to provide an influx of capital to fix these needs provides a logical partnership.
“Frankly, if we do it together, we're going to be able to do leverage each other's resources far more effectively,” Vilsack said. “We'll do more projects and create more opportunities as a result.”
With USDA, CoBank and Capitol Peak all playing a role in the investments that will occur, Vilsack said loan applicants will be able to reach out to all three entities to begin the process. Vilsack half-jokingly compared the system to that of online dating service eHarmony in that they will work to partner the right project with the right investment plan.
The loans will be offered with market conditions and will be implemented in the similar ways that USDA and CoBank already independently operate, but Vilsack and CoBank CEO Robert Engel both said the partnership will allow the entities to “break down the silos” that previously stood in the way of collaboration.
“The beauty of this is that we’re not going to silo this stuff anymore. We’re all working collaboratively together and breaking the silos down.
Vilsack said similar federal programs like USDA Rural Development will still continue to operate, but this fund will serve as an additional way for communities to receive funding for improvements. He's hopeful USDA's knowledge of the infrastructure needs of rural America and history of investing in projects in all 50 states will encourage members of the private sector to see the potential in their investment.“We know the need is out there, and we also know the profit opportunity is out there,” Vilsack said.
Engel said he wants to find more investors to contribute to the fund, and he hopes to show the benefit of an investment in rural America.
“(Rural America) is a pretty well-kept secret, but we're going to work on that,” Engel said.
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