Last updated: July 28, 2020
|Incentive Type:||Loan Program|
|Administrator:||Minnesota Department of Agriculture|
|Funding Source:||Minnesota Rural Finance Authority (RFA)|
|Eligible Renewable/Other Technologies:||Biomass, Anaerobic Digestion|
|Maximum Loan:||RFA can provide up to $250,000 of loan principal|
|Loan Term:||10 year maximum loan term, RFA portion at zero-interest|
|Name:||Minn. Stat. § 41B.049|
|Name:||Minn. Stat. § 41B.03|
Established in 1998, the Minnesota Dept. of Agriculture Methane Digester Loan Program helps livestock producers install on-farm anaerobic digesters used for the production of electricity by providing zero-interest loans to eligible borrowers. The loan program is part of the Rural Finance Authority (RFA) revolving loan fund, through which farmers can receive financial aid for many different farming-related activities and improvements. The general eligibility requirements for loans through the RFA are contained in Minn. Stat. § 41B.03, which permits loans only to Minnesota residents, domestic family-farm corporations, and family-farm partnerships. The methane digester loan program is specifically authorized by Minn. Stat. § 41B.049.
In order to be eligible for a Methane Digester Loan, a borrower must:
- locate the projects and utilize the equipment and practices on land located in Minnesota;
- provide evidence of financial stability;
- demonstrate an ability to repay the loan;
- provide evidence that the practices implemented and capital assets purchased will be
properly managed and maintained; and
- not have previously received a loan under this program
Within the Methane Digester Loan Program, the RFA may make a direct loan to the borrower or act as a participant in the loan with an eligible lender (more than 400 such approved lenders exist throughout the state). State participation is limited to 45% of the loan principal in the case of participation loans and may not exceed $250,000 for either participation or direct loans. The loan term is limited to a maximum of 10 years and repayment terms for the RFA's participation interest may differ from those of the outside lender. Loans can be used as a match for federal loans and grants, but may not be used to refinance a debt existing prior to the application.
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