Categorical Area: Economic Development, Energy
The Energy Infrastructure Revolving Loan Program (EIRLP) is authorized under Iowa Code Section 476.46 as enacted by 2021 Iowa Acts, Senate File 619. The administrative rules for the AERLP can be found in the Iowa Administrative Code 261.406. The program can provide low-interest loans for the development and construction of energy infrastructure. The Iowa Economic Development Authority, in consultation with the Iowa Energy Center (IEC) Board, administers the EIRLP.
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.
A policies and procedures handbook is recommended for review. The policies and procedures for the EIRLP provide the program requirements and the framework of how the program will be administered within three main categories of Program Details, Application Process and Administration. This document will be reviewed and approved by the IEC Board at least once per year and will remain in effect until any changes are adopted by the board. The policies and procedures handbook can be found on IEDA’s website at this location: https://www.iowaeda.com/userdocs/programs/resources/EIRLPHandbook093021.pdf
- Businesses incorporated or organized in Iowa or authorized to do business in Iowa, including businesses operated as sole proprietorships with a registered trade name
- Rural electric cooperatives
- Municipal utilities
Energy infrastructure is defined in Iowa Code as land, buildings, physical plant and equipment, and services directly related to the development of projects used for, or useful for, electricity or gas generation, transmission, storage, or distribution. The purpose of the program is to support:
- Energy infrastructure development
- Electric grid modernization
- Energy-sector workforce development
- Emergency preparedness for rural and underserved areas
- Expansion of biomass, biogas, and renewable natural gas
- Innovative technologies
- Development of infrastructure for alternative fuel vehicles
The policies and procedures handbook provides examples of project types that can fulfill the program purpose.
Examples of eligible costs include, but are not limited to:
- 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.
- Costs associated with maintenance, operation, or repair of a project during the term of the loan.
The minimum loan amount is $50,000 and the maximum is $2.5 million. An applicant may apply for a loan for up to 75% of the total costs of the project. The remainder of the project costs not financed by the EIRLP may include costs otherwise considered ineligible for EIRLP which may include documented “soft” costs including feasibility studies, engineering, and final design, permitting and regulatory costs, or other determined by the board to be necessary for the development of energy infrastructure and the project described in the application. The committee may exclude certain types of costs from being included as matching funds.
The duration of the loan will typically be 5 to 10 years, but shall not exceed 15 years. To determine the loan term, the Loan Committee will consider cash flow factors including tax credits, projected revenue or savings, and other financing. The EIRLP loan may, in some instances, be paid back before the applicant sees their own payback for the project.
The IEC Board will not issue a loan that exceeds the value of the collateral provided. The board may consider the borrower’s credit rating (or bond rating, if applicable) in determining what form of collateral is acceptable. Certain forms of collateral may require costs to be incurred by the applicant prior to disbursement. The following forms of collateral will be accepted with definitions and examples of what is acceptable:
- Real property: This must be buildings and/or land that can be secured through a mortgage held by IEDA. A lien on project-financed equipment could be provided in addition to the other real property but not as a standalone form of collateral. There must be sufficient equity in the property to cover the EIRLP loan in the event of default, in addition to other liens and/or mortgages on the property.
- Dedicated certificate of deposit: This requires the applicant to deposit an amount into an account at a financial institution which locks funds away for a specific period of time, in this instance the loan maturity date. These typically get better interest rates than savings accounts, providing a financial benefit if the borrower has the resources to put into a dedicated CD.
- Irrevocable letter of credit: This is a letter signed by the borrower’s bank that authorizes IEDA to draw funds of a sum not to exceed the loan amount, in the event of default of the loan agreement with IEDA. This is the preferred form of collateral.
- Corporate guarantee: This must be provided by a separate corporation that has different ownership from the borrower. A letter from this corporation should be provided in the application that pledges their guarantee if the loan is awarded.
- Utility revenue or reserve funds, if applicable. This option is only applicable for projects that have a source of revenue or reserve funds as a utility or a borrower that has a power purchase agreement that could be reassigned to IEDA in the event of default.
- Other forms of collateral if approved by the board, and only if the forms of collateral listed above are inadequate.
How to Apply
- Applications must be submitted through www.iowagrants.gov
- Application cycles will be quarterly and updated deadlines provided on the program webpage, which can be found at https://www.iowaeda.com/iowa-energy-office/energy-loans/
- Questions may be directed to the Program Manager, Stephanie Weisenbach at firstname.lastname@example.org or by calling 515-348-6221. Questions focused on a specific application cycle should 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 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.
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.