---
kind: "section"
citation: "16 U.S.C. § 2703"
title: "16"
title_heading: "Conservation"
number: "2703"
heading: "Loans for project costs"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/16/2703"
units:
  - "Chapter 47 — Small Hydroelectric Power Projects"
---

# §2703. Loans for project costs

- (a) **Authority—** The [Secretary](/usc/16/410r–5.md?p=c-1) is authorized to make loans to any [municipality](/usc/16/2708.md?p=a-7), [electric cooperative](/usc/16/2708.md?p=a-2), [industrial development agency](/usc/16/2708.md?p=a-3), [nonprofit organization](/usc/16/2708.md?p=a-5), or other [person](/usc/16/2708.md?p=a-8) of up to 75 percent of the proj­ect costs of a small hydroelectric power proj­ect. No such loan may be made unless the [Secretary](/usc/16/410r–5.md?p=c-1) finds that—
  - (1) the [project](/usc/16/410r–5.md?p=c-4) will be constructed in connection with an [existing dam](/usc/16/2708.md?p=a-6) or dams,
  - (2) all licenses and other required Federal, [State](/usc/16/590q.md?p=a), and local approvals necessary for construction of the [project](/usc/16/410r–5.md?p=c-4) have been issued,
  - (3) the [project](/usc/16/410r–5.md?p=c-4) will have no significant adverse environmental effects, including significant adverse effects on [fish and wildlife](/usc/16/3102.md?p=17), on recreational use of water, and on stream flow, and
  - (4) the [project](/usc/16/410r–5.md?p=c-4) will not have a significant adverse effect on any other use of the water used by such [project](/usc/16/410r–5.md?p=c-4).

  The [Secretary](/usc/16/410r–5.md?p=c-1) may make a commitment to make a loan under this subsection to an applicant who has not met the requirements of [paragraph (2)](#a-2), pending compliance by such applicant with such requirements. Such commitment shall be for period[^1] of not to exceed 3 years unless the [Secretary](/usc/16/410r–5.md?p=c-1), in consultation with the [Commission](/usc/16/544.md?p=c), extends such period for good cause shown. Notwithstanding any such commitment, no such loan shall be made before such [person](/usc/16/2708.md?p=a-8) has complied with such requirements.

- (b) **Preference—** The [Secretary](/usc/16/410r–5.md?p=c-1) shall give preference to applicants under this section who do not have available alternative financing which the [Secretary](/usc/16/410r–5.md?p=c-1) deems appropriate to carry out the [project](/usc/16/410r–5.md?p=c-4) and whose [projects](/usc/16/410r–5.md?p=c-4) will provide useful information as to the technical and economic feasibility of—
  - (1) the generation of electric energy by such [projects](/usc/16/410r–5.md?p=c-4), and
  - (2) the use of energy produced by such [projects](/usc/16/410r–5.md?p=c-4).
- (c) **Information—** Every applicant for a license for a [small hydroelectric power project](/usc/16/2708.md?p=a-1) receiving loans pursuant to this section shall furnish the [Secretary](/usc/16/410r–5.md?p=c-1) with such information as the [Secretary](/usc/16/410r–5.md?p=c-1) may require regarding equipment and services proposed to be used in the design, construction, and operation of such [project](/usc/16/410r–5.md?p=c-4). The [Secretary](/usc/16/410r–5.md?p=c-1) shall have the right to forbid the use in such [project](/usc/16/410r–5.md?p=c-4) of any equipment or services he finds inappropriate for such [project](/usc/16/410r–5.md?p=c-4) by reason of cost, performance, or failure to carry out the purposes of this section. The [Secretary](/usc/16/410r–5.md?p=c-1) shall make information which he obtains under this subsection available to the public, other than information described as entitled to confidentiality under [section 796(d) of title 15](/usc/15/796.md?p=d).
- (d) **Joint participation—** In making loans for [small hydroelectric power projects](/usc/16/2708.md?p=a-1) under this section, the [Secretary](/usc/16/410r–5.md?p=c-1) shall encourage joint participation, to the extent permitted by law, by applicants eligible to receive loans under this section with respect to the same [project](/usc/16/410r–5.md?p=c-4).

## Footnotes

[^1]: So in original. Probably should be “for a period”.

## Source credit

(Pub. L. 95–617, title IV, § 403, Nov. 9, 1978, 92 Stat. 3155.)

## Notes

### Editorial Notes

### References in Text

The Secretary, referred to in text, and the Commission, referred to in subsec. (a), mean the Secretary of Energy and the Federal Energy Regulatory Commission, respectively, see section 2602(3), (14) of this title.