USDA expected to issue up to four loan guarantees for bioenergy projects

In Washington, Digest sources continue to point toward a release of USDA loan guarantees this week – Secretary of Agriculture Tom Vilsack is pressing his team to finalize conditional offers prior to the new Congress convening on Capitol Hill. USDA loan guarantee funds were previously zeroed out in an omnibus spending bill which died right before year end.

The hold up? Office of Management & Budget scoring on the loan guarantee program is said to be too low to fund, at first glace,  all four loan guarantees, so USDA officials are scrambling for OMB adjustments or fresh funding sources to be able to announce all four guarantees together. An agreed agreed ratio for prospective defaults that would be covered by loan guarantee funds determines the extent to which loan guarantee funds are available- for example, a 10:1 ratio would allow USDA to issue $10 in loan guarantees for every $1 in actual funding.