The USDA’s Rural Business Cooperative Service on Jan. 14 sent a letter to agency staff implementing a 90-day administrative pause on the acceptance, processing and awarding of loan note guarantees for biodigester projects.“This action is being taken to allow the agency to conduct a comprehensive review of the existing portfolio of projects, including an assessment of delinquency rates, project performance, operational sustainability and underwriting guidelines to ensure prudent stewardship of federal resources,” wrote J.R. Claeys, administrator of USDA RBCS, in the letter. “This [unnumbered letter (UL)] does not establish new eligibility requirements and does not constitute a determination regarding the merits or viability of any individual applicant or technology.”The letter explains that RBCS has experienced an increase in biodigester applications across its guaranteed lending portfolio in recent years. “Concurrently, internal portfolio data indicates elevated rates of project underperformance, loan delinquency and operational failure among existing projects falling under these technologies,” Claeys wrote.&nbsp;According to Clayes, 21 loans for anaerobic biodigesters worth a combined $386.4 million are currently seeing a $102.6 million, or 27%, delinquency.&nbsp;“The Rural Business Cooperative Service has determined that closer examination is warranted at this time, to ensure that current program administration appropriately accounts for financial, operational, and market risks associated with such projects, &nbsp;Claeys wrote.&nbsp;The letter also places a similar 90-day restriction on the acceptance, processing and awarding of loan guarantee notes for projects involving controlled environmental agriculture, such as vertical farming, hydroponics, aeroponics and aquaponics.&nbsp;A full copy of the letter is available on the USDA Rural Development <a href="https://www.rd.usda.gov/media/file/download/temporary-administrative-pause-biodigesters-.pdf">website</a>.

2026-01-26 - USDA pauses loan guarantee funding for biodigester projects (Biomass Magazine)

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The USDA’s Rural Business Cooperative Service on Jan. 14 sent a letter to agency staff implementing a 90-day administrative pause on the acceptance, processing and awarding of loan note guarantees for biodigester projects. 

USDA pauses loan guarantee funding for biodigester projects

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