§5001.307. Specific application requirements for REAP projects.
7 C.F.R. § 5001.307
In addition to the requirements specified in § 5001.303, a lender seeking a loan guarantee for a REAP project must submit the information identified below based on total project costs.
Borrower eligibility information.
Eligible borrowers must meet the definition of agricultural producer or rural small business as defined in § 5001.3. Agricultural producers seeking funding for a RES or EEI project may apply as either a rural small business or as an agricultural producer, provided they meet the applicable eligibility requirements. Agricultural producers seeking funding for an EEE project must be eligible and apply as an agricultural producer.
The borrower must provide the primary NAICS code applicable to the borrower's business concern and certify on the Agency approved application form or system that it meets the definition of agricultural producer or rural small business. The Agency reserves the right to request supporting documentation to verify borrower eligibility.
Borrower description. Describe the ownership of the borrower, including the information specified in paragraphs (b)(1) through (3) of this section, as applicable. Include a description of the borrower's existing farm, ranch, or business operation, including how long the borrower has been in operation. Rural small businesses and agriculture operations owned by Tribes should provide documentation to adequately show the separation of the applicant and the Tribal government.
Describe how the borrower meets the ownership and control requirements as identified in § 5001.126(e)(2).
For each entity(ies) the borrower controls or entity(ies) it is controlled by, provide a list of the individual owners with their contact information. Describe the relationship between the borrower and the other entity(ies), including percentage of ownership and control, management, passive investor ownership, and any products exchanged. Organizational charts to demonstrate the structure of the borrower should be submitted when available.
Identify the ethnicity, race, and gender of the borrower. Identify if the borrower is a veteran. This information is optional and is not required for a complete application but may be used by the Agency to award priority points.
Project information. Provide information concerning the project as a whole and its relationship to the borrower's operations, including:
Identification as to whether the project is an RES, EEI, or EEE project. Include a description and the location of the project;
Description of how the project will have a positive effect on resource conservation, public health, and the environment;
Identification of the amount of funds and the source(s) of funds the borrower is proposing to use for the project. Provide written commitments for funds at the time the application is submitted to receive points under this scoring criterion.
For project funding provided by the borrower, documentation may include bank statements that demonstrates availability of funds.
For project funding that comes from a third party, a commitment letter signed by an authorized official of the third party. The letter must be specific to the project and must identify the dollar amount of any loan or other funding and any applicable rates and terms. If the third-party commitment is for a loan, the commitment must be firm; a letter-of-intent or pre-qualification letter subject to underwriting requirements or contingencies is not acceptable.
Feasibility study. For RES projects only, when deemed necessary by the lender or Agency, an analysis conducted in conformance with the definition of feasibility study found in § 5001.3 and with applicable content in appendix A to subpart D of this part.
Technical report. All eligible projects must have technical merit and provide information as identified in § 5001.106(e), § 5001.107, or § 5001.108 and (e)(1) through (3) of this section.
Level of detail. Information provided must be in sufficient detail to enable the Agency to determine the technical merit of the project. Design drawings and process flowcharts are encouraged as exhibits. The technical report requirements can be provided in the technical feasibility section of a feasibility study, instead of completing a separate technical report.
Sufficient information to enable the calculation of simple payback as defined in § 5001.3;
For RES projects, sufficient information to enable the calculation of the percentage of historical use of energy compared to the amount of renewable energy that will be generated once the project is operating at its steady state operating level. If the project is closely associated with a residence, satisfactory demonstration must be made that 50 percent or more of the projected renewable energy will benefit the agricultural operation or rural small business; and
Demonstrate that the RES, EEI, or EEE project will operate or perform over the project's useful life in a reliable, safe, and a cost-effective manner, which may include but is not limited to addressing project design, installation, operation, maintenance, and warranties.
In addition, the following technologies, must provide a technical report in accordance with paragraphs (e)(1)(v) through (viii) of this section, as applicable:
Hydrogen;
Ocean energy;
Geothermal electric generation;
Anaerobic digesters and biogas;
Biomass;
Hybrid applications;
Renewable energy systems with storage components; and
Energy efficiency improvements
For total project costs in the amount of $80,000 or less, a technical report, as identified in § 5001.303(c)(16), prepared in accordance with the following paragraphs, as applicable:
EEI technical reports. Each EEI technical report submitted under this section must provide:
(1) A description of the proposed EEI, including its intended purpose;
(2) Vendor/installer certification that the EEI project uses commercially available technology;
(3) Vendor/installer certified projections on the quantity of energy to be saved;
(4) Certification by vendor/installer that they are qualified to complete the project as intended;
(5) Vendor/installer certification that the EEI system will operate and perform over the project's useful life in a reliable and cost-effective manner; and
(6) An estimate of simple payback, including all calculations, documentation, and any assumptions.
RES technical reports. Each RES technical report submitted under this section must provide:
(1) A description of the proposed RES project, including its intended purpose;
(2) Vendor/installer certified projections on energy to be replaced and/or generated, including the quality and availability of the renewable resource to the project; if there is a residence closely associated with the RES project, the historical amount of energy used by the residence and the historical amount of energy used by the agricultural operation or rural small business, as applicable, to satisfactorily demonstrate 50 percent or more of proposed generation will benefit the agricultural operation or rural small business;
(3) Vendor/installer certification that the RES project uses commercially available technology;
(4) Certification that the vendor/installer is qualified to complete the project as intended;
(5) Certification that the project will perform over its useful life in a reliable and cost-effective manner; and
(6) The projected financial performance of the project. The description must address total project costs, revenues accrued from the sale or crediting of energy, quantity and value of energy offset, and revenue from byproducts. Include applicable investment and other production incentives and indicate if they are one time or reoccurring incentives. Provide an estimate of simple payback, including all calculations, documentation, and any assumptions.
EEE technical reports. Each EEE technical report submitted under this section, regardless of total project costs, must provide:
(1) A description of the proposed EEE and its intended purpose, including baseline data, specifications, and efficiency data;
(2) Vendor/installer certification that the EEE project uses commercially available technology;
(3) Vendor/installer certification of the proposed energy consumption quantity and price per unit of the energy efficiency equipment to be installed;
(4) Certification by vendor/installer that they are qualified to complete the project as intended;
(5) Vendor/installer certification that the EEE system will operate and perform over the project's useful life in a reliable and cost-effective manner; and
(6) An estimate of simple payback, including all calculations, documentation, and any assumptions.
For EEI guaranteed loan projects with total project costs greater than $80,000, the technical report identified in paragraph (e)(1)(v)(A) of this section applies, except that appendix C to subpart D of this part is to be followed to prepare the report.
For RES guaranteed loan projects with total project costs greater than $80,000 and up to but not including $200,000, the technical report identified in paragraph (e)(1)(v)(B) of this section applies, except that appendix D to subpart D of this part is to be followed to prepare the report.
For RES guaranteed loan projects with estimated total project costs of $200,000 or greater, the technical report identified in paragraph (e)(1)(v)(B) of this section applies, except that appendix E to subpart D of this part is to be followed to prepare the report.
Modifications. If the technical report is prepared prior to the borrower's selection of a final design, equipment vendor, or contractor, or other significant decision, the borrower may modify the report and resubmit it to the Agency, provided that the overall scope of the project is not materially changed as determined by the Agency. Changes in the technical report may require additional environmental documentation in accordance with 7 CFR part 1970.
Hybrid projects. If the application is for a hybrid project, technical reports must be prepared for each technology that comprises the hybrid project.
Notes, amendments, and revision history
Amendments
[85 FR 42518, July 14, 2020, as amended at 89 FR 79721, Sept. 30, 2024]
Authority
Authority: 5 U.S.C. 301; 7 U.S.C. 1926(a); 7 U.S.C. 1932(a); and 7 U.S.C. 8107.
Source
Source: 85 FR 42518, July 14, 2020, unless otherwise noted.
Amendments
[85 FR 42518, July 14, 2020, as amended at 89 FR 79721, Sept. 30, 2024]