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You must also provide accurate environmental information beginning with day one of
the application process, and continue to note all changes and revisions throughout the
project’s course of development.
Section 3: Update of Application Materials
As necessary, provide updates to the application materials you submitted in Phase 1.
Section 4: Other Information
Provide any other information requested by USDA Rural Development. (Examples
include contracts and agreements for feedstock, offtake, engineering, procurement,
construction, and so on.)
Section 5: Lender Analysis and Credit Evaluation
The lender must analyze all credit factors associated with each proposed loan, and
apply its professional judgment to determine that, considered together, the credit
factors ensure loan repayment. The application must adequately address all key risk
factors that contribute to the creditworthiness of the project. USDA Rural Development
will carefully review the lender’s analysis to assess project strengths and weaknesses.
We will perform technical, financial, and legal reviews to identify and assess the scale
and impact of risks associated with the project, the allocation of risk among the parties,
and the extent to which risks are mitigated. Examples of risk factors include:
•
Debt service and structure: debt service coverage, equity contribution, debt
maturity, financial covenants, derivatives, and liquidity
•
Project revenue: off-take agreements, counterparty credit, market demand,
industry, and competition
•
Technology: commercial availability, complexity and scalability, equipment
warranties, and guarantees
•
Project sponsor and structure: ownership and equity investment
•
Operational: management team, USDA Rural Development contract terms,
availability of labor, and pass-through
•
Construction and Completion: Engineering, procurement, and construction
(EPC) contract, cost structure, delay risk, and contingency plans
•
Legal: ability to ring-fence assets, step-in rights, Intellectual Property (IP) rights,
strength of contracts, land leases and permits; and state and local regulations
•
Resources and Feedstocks: strength and duration of agreements; availability of
substitute feedstocks