August 03, 2016

New USDA Guidance for the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program

On July 25, 2016, the United Stated Department of Agriculture (UDSA) published a Notice of Solicitation of Applications (NOSA) for the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program (9003 Program). The 9003 Program provides loan guarantees to approved applicants for up to 80 percent of the total eligible project costs up to $250 million. Set forth below are explanations of certain provisions of the NOSA which we believe will be of interest to you.

Description of Funding Opportunity

The purpose of the 9003 Program is to assist in the development of new and emerging technologies for the development of advanced biofuels, renewable chemicals and biobased product manufacturing. The program guarantees loans made to fund the development, construction, and retrofitting of:

  • commercial scale biorefineries using eligible technology;
  • biobased product manufacturing facilities that use new commercial scale processing and manufacturing equipment and technology; and
  • facilities that convert renewable chemicals and other biobased outputs of biorefineries into end-user products on a commercial scale.

Two-Phase Application Process

The USDA Rural Business-Cooperative Service (the Agency) has implemented a two-phase application process for loan guarantees under the 9003 Program. The initial (Phase 1) application requires general project information to determine lender, borrower and project eligibility; preliminary economic and technical feasibility information; and the priority score of the application. Those applicants invited to participate in Phase 2 will submit an application that includes detailed planning, engineering, environmental, technical and financial information as well as the lender's credit evaluation. The NOSA is announcing two separate application cycles commencing on October 3, 2016 and April 3, 2017, respectively, as more specifically described below:

  1. Non-Binding Letter of Intent to Apply: No later than 30 calendar days prior to a Phase 1 application cycle deadline, the lender or borrower must submit to the Agency a non-binding letter of intent to apply for a loan guarantee. Failure to submit the letter of intent within 30 days of the application deadline will result in the application not being accepted for that particular application cycle. The letter of intent due date is September 6, 2016 for the October 3, 2016 application cycle and March 6, 2017 for the April 3, 2017 cycle.
  2. Phase 1 Applications: Under the NOSA, Phase 1 applications may be submitted during one of two annual cycles and are due by either October 3, 2016 or April 3, 2017.
    1. Initial Cycle 1 (Due By October 3, 2016): To be considered for 9003 Program funds within the first cycle under the NOSA, Phase 1 applications, consisting of one paper copy and an electronic copy containing the same information, must be received by the USDA Rural Business-Cooperative Service, Energy Division in Washington D.C. by no later than 4:30 p.m. Eastern Daylight Time, October 3, 2016. Applications received after this deadline will be considered in Cycle 2.
    2. Initial Cycle 2 (Due By April 3, 2017): To be considered for 9003 Program within the second cycle under the NOSA, Phase 1 applications must be received by the Agency by no later than 4:30 p.m. Eastern Daylight Time, April 3, 2017. Applications received after the second cycle's deadline will be considered in a subsequently announced application cycle.
    3. Content of Applications: For each guarantee request, the Lender must submit to the Agency an application that conforms with 7 CFR 4279.261. The Agency has developed an Application Guide that explains the application procedures, content and process for submission of an application, and which may be found here.
    4. d. Incomplete Applications Will Not be Considered: Lenders will be notified of the elements of their applications which are incomplete. If a lender makes the required edits and resubmits the application prior to the cycle deadline, the application will be considered.
  3. Phase 2 Applications: Applicants whose Phase 1 applications receive higher priority scores will receive written notice of an invitation to submit Phase 2 applications. Phase 1 applications with lower priority scores not invited to Phase 2 will be carried forward and compete for one additional review cycle.
  4. Evaluation and Scoring: The Agency will review, evaluate, score and award applications received in response to the NOSA based on provisions found in 7 CFR part 4279, subpart C as published in the Federal Register on June 24, 2015 (the Interim Final Rule) and as indicated in the NOSA.
  5. Biobased Product Manufacturing: The NOSA also contains a solicitation of applications for biobased product manufacturing. The eligibility requirements and application processing requirements for prospective lenders and borrowers will not change from those listed above for the 9003 Program, generally. For biobased product manufacturing projects, the eligible project requirement is modified to reflect that eligible projects will use technologically new commercial scale processing and manufacturing equipment and facilities capable of converting renewable chemicals and other biobased outputs of biorefineries into end-user products on a commercial scale.

For more information, read the full text of both the NOSA and the Interim Final Rule, as published in the Federal Register.

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