On Monday, July 27, 2009, Governor Jim Doyle announced the approval of $28 million for the Wisconsin State Energy Program to support clean energy manufacturing projects. The State Energy Program is being funded from the American Recovery and Reinvestment Act (“the Act”). The state will receive a total of $55 million for this program of which the $28 million represents the first installment.
According to Governor Doyle’s announcement, “Wisconsin is the only state to target this program’s funds exclusively to manufacturing. Wisconsin has a larger percentage of employees in manufacturing than any other state, and we can leverage our innovative, high skilled workforce to create clean energy products and processes.”
Specifically, this program, which will be administered by the Department of Commerce (“Commerce”), will target low-interest loans to businesses that promote:
- major renewable energy production projects;
- the manufacture of clean energy products;
- advanced manufacturing of clean energy components;
- retooling to provide component parts and other critical needs for a successful, totally integrated supply chain; and
- improving industrial users’ competitiveness through energy efficiency and renewable energy deployment.
Eligible program loan recipients are for-profit manufacturing businesses. Eligible projects must create or retain jobs, reduce green house gas emissions, reduce fossil fuel use and/or deploy renewable energy.
Eligible projects include the following:
- Job Creation and Retention through Clean Energy Advanced Manufacturing:
Businesses that will create or retain significant numbers of full-time jobs in businesses that manufacture clean energy products (for example wind, solar, biofuels, and advanced electrical storage systems) or otherwise help reduce the consumption of fossil fuels.
- Job Creation and Retention through Clean Energy Supply Chain Development:
Business for the advanced manufacturing of clean energy components and assist companies in retooling to provide component parts and other critical needs for a successful, totally integrated supply chain for wind turbines, solar PV and water heating equipment, renewable fuel production equipment, digester equipment, diesel idling reduction equipment, advanced energy efficient lighting products, energy efficiency equipment and products.
- Job Creation and Retention through Industrial Facilities Reduction of Fossil Fuel Use: Businesses that invest in energy efficiency and renewable energy deployment, including boiler efficiency upgrades, fuel conversion projects from fossil fuel to biomass and additions of renewable energy to industrial processes.
In terms of prioritization, special consideration will be given to projects that have obtained other necessary financing pieces, have zoning and environmental permits and clearances, and are otherwise ready to go. As it relates to finance terms and conditions, Commerce will provide below market interest rate at a fixed rate of 2 percent for the life of the loan. Loan terms cover equipment (5-10 years) and working capital (5-7 years). Loans are intended to be gap financing and typically will not exceed 25 percent of project costs. Award terms will include specific collateral requirements and the personal guarantees of all individuals with an ownership interest of 20 percent or more.
This client alert is one of a series designed to provide summaries of the American Recovery and Reinvestment Act of 2009 ("the Act") and information and guidance regarding opportunities and relief made available through The Act. All of The Act client alerts are available on Michael Best's Stimulus and Economic Recovery Team publications page. For additional information on this program and to learn more about the application process, underwriting guidelines and other considerations, please feel free to contact one of the authors of this alert or your Michael Best attorney.
If you are interested in learning about other provisions included in The Act, the Michael Best Stimulus and Economic Recovery Team is prepared to assist you in understanding the implications and in developing and implementing a strategy to secure the benefits of this unprecedented legislation. Specifically, we will assist you to identify opportunities, prepare appropriate proposals and make targeted contacts to secure funds. We will also work with you to ensure that your applications are tailored to meet your needs and that your funded projects proceed in compliance with award requirements and applicable laws.