The National Rural Electric Cooperative Association has expressed concern that efforts by the Rural Utilities Service (RUS) to develop and implement a project finance program will be counterproductive to RUS’s and the U.S. Department of Agriculture’s efforts to support their core missions of serving rural America.

To date, the Rural Electrification Act has successfully supported the electrification of the rural United States using a system-wide lien finance structure under which borrowers that are load serving utilities pledge their entire electric systems as security. System financing has resulted in excellent performance of the RUS loan portfolio for both taxpayers and borrowers. In contrast, the federal government’s track record of project financing for renewable energy has proven that a renewable energy project finance program is a much riskier, more costly endeavor.

Excerpts of the comments appear below and the full text, including observations in response to some of the questions posed in the Project Finance ANPR, is available at

  • RUS’s current borrowers do not need an RUS project finance program, and an RUS project finance program is not needed to support the development of renewable energy.
  • Project finance lending done by RUS will be significantly more risky than the utility system lien lending it has been doing with electric cooperative borrowers.
  • An RUS project finance program will require a significant increase in direct costs for increased staffing and outside consultants.
  • RUS’s already limited staff does not have the capacity or the necessary experience to develop and implement a project finance program.
  • Appropriations and calculation of the credit subsidy for any RUS project finance program should be done separately from appropriations and credit subsidy calculations for RUS’s traditional utility system lien program financing.

The National Rural Electric Cooperative Association is the national service organization that represents the nation’s more than 900 private, not-for-profit, consumer-owned electric cooperatives, which provide service to 42 million people in 47 states.