Categorical Area: Economic Development, Energy
The Alternate Energy Revolving Loan Program (AERLP) is authorized under Iowa Code Section 476.46 and provides zero interest loans to encourage the development of alternate energy production facilities and small hydro facilities within the state. The Iowa Economic Development Authority, in consultation with the Iowa Energy Center (IEC) Board, administers the AERLP.
The IEC Board has a designated Loan Committee comprised of board members involved with review and recommendation of applications. The IEC Board makes funding decisions for loans at least once per quarter. Loans will be made by IEDA directly to borrowers, which will remit payments to IEDA.
The administrative rules for the AERLP can be found in the Iowa Administrative Code 261.405. An application handbook is recommended for review, which describes program policies, requirements and instructions for the application. Please refer to the administrative rules and application handbook for more information.
- Individuals whose primary residence is in Iowa.
- Businesses registered and domiciled in Iowa.
- If a business applicant is not incorporated in Iowa, a Certificate of Authority from the Iowa Secretary of State’s office must be provided.
- This requirement applies to each member of a Limited Liability Company and each member must be an eligible borrower. LLCs will be required to provide a list of members, location and percentage of equity ownership.
- Water and wastewater utilities, rural water districts and sanitary districts.
Alternate Energy Production (AEP) facilities and small hydro facilities are defined in Iowa Code section 476.42. The following technologies and resources can be utilized to produce energy for an eligible project: solar, wind, waste management, resource recovery, refuse-derived fuel, agricultural crops and residue, and wood-burning. A small hydro facility is a hydroelectric facility at a dam. Small hydropower is commonly associated with generating 10 MW or less of power. For both AEP and small hydro facilities, components at the project site that are related to the construction, completion or operation of the facility are eligible.
Additional eligible projects or components of an AEP that fit the definition include, but are not limited to:
energy storage included with an AEP, anerobic digestion and biogas production projects, combined heat and power, and wind repower projects.
Projects must be located in Iowa and be wholly owned by the borrower. The borrower must be the owner, contract purchaser or lessee of the real property where the project is located.
- Real and personal property comprising a project
- Materials and equipment required for necessary site preparation, construction and installation of a project
- Labor for site preparation, construction and installation of a project. Only labor that is performed by a third party such as an independent contractor will be considered an eligible cost.
Amount Minimum: $25,000 and up to 50% of eligible project costs. The eligible project costs must be a minimum of $50,000 to meet these requirements. The loan amount cannot exceed the value of the collateral.
Amount Maximum: No more than $1 million per project and no more than $1 million per borrower outstanding at any time. This includes members of LLCs that are included in other loans.
Applicants will request a loan term in their application, to be evaluated by IEDA and the IEC Board. The Loan Committee will recommend an award for a loan with the shortest possible term to enable the quickest possible repayment. Most loan terms are between five and nine years. The shortest possible term will be determined through an analysis of the following:
- The estimated useful life of the project
- The estimated return on investment of the project
- The term of any other loan used to finance the project
The Alternate Energy Revolving Loan Program requires collateral which matches or exceeds the value of the loan request. The following forms of collateral are acceptable for the program:
- Real property
- Dedicated certificate of deposit
- Irrevocable letter of credit
- Corporate guarantee
Applicants are expected to pledge collateral in the application that can be offered in the event of an award, contingent upon IEDA reviewing, accepting and securing collateral prior to disbursement of funds.
How to Apply
- Applications must be submitted through www.iowagrants.gov
- Application cycles will be quarterly and updated deadlines provided at IowaGrants.gov.
- Questions may be directed to the AERLP Program Manager, Stephanie Weisenbach at aerlp@IowaEDA.com or by calling 515-348-6221. Questions focused on a specific application cycle must be submitted IEDA at least one week prior to the application deadline to ensure adequate time for receipt, consideration and response.
Confidentiality and Application Access
Only one individual should be the IowaGrants representative for the project, either the applicant themselves or an authorized representative that would be responsible for managing the IowaGrants account and correspondence between IEDA and the applicant as needed.
The application is a public document under Iowa law. However, under some circumstances, certain information may be kept confidential. IEDA considers the following information to be confidential and will withhold it from public inspection, even without a request for confidential treatment.
- For individuals, the confidential information includes a social security number, the most recent year tax return, most recent W2, and personal financial statement if available. IEDA will conduct credit checks on individuals applying for eligible projects. The results of credit inquiries will also be held confidential.
- For businesses, the confidential information includes its most recent year tax return, most recent audited financial statement and the FEIN/TAX ID when a social security number is used.
- Power Purchase Agreements and supplemental financial information, if applicable for the project, will be considered confidential.
If an applicant wishes to have additional information treated as confidential, they must fill out a Confidential Treatment Request Form. This form is available upon request to IEDA. IEDA will make a determination about what, if any, additional information will be treated as confidential.
Application Review and Awards
Applications will be reviewed by IEDA staff, the Loan Committee of the Iowa Energy Center Board, and awards will be made by the IEC Board. The IEC Board will approve, defer, or deny applications for loans. IEDA staff may negotiate the amount, term, and other conditions of each loan prior to award. Costs incurred prior to the board’s approval of a loan are ineligible.
Borrowers will be required to meet conditions before a contract is signed and/ or before funds are dispersed to the borrower. All borrowers will be required to secure their pledged collateral before disbursement of funds. Examples of other conditions include but are not limited to a fully executed interconnection agreement for the AEP owner and utility, or evidence that other financing or funding sources listed in the application have been approved.
Payments will be due monthly to IEDA and provided through Automated Clearing House (ACH).