CoBank joins USDA in new public-private partnership
CoBank, a cooperative bank serving agribusinesses, rural infrastructure providers and Farm Credit associations throughout the United States, announced that it has joined with the U.S. Department of Agriculture in the formation of a new public-private partnership focused on infrastructure investment in rural America.
The new "U.S. Rural Infrastructure Opportunity Fund" will serve as a source of private-sector capital to partner with USDA on wide variety of infrastructure projects in rural communities. CoBank will act as anchor investor and has committed $10 billion of balance sheet capacity to co-lend with the fund.
The fund was formally launched today in Washington, D.C. at a White House event focused on rural economic development featuring U.S. Secretary of Agriculture Tom Vilsack. "This fund represents a new approach to our support for job-creating projects across the country," Vilsack said. "USDA and other agencies invest in infrastructure through a variety of federal initiatives, but our resources are finite and there are backlogs of projects in many parts of the economy. We know where investment opportunities exist, so we are in a position to help promote these projects among investors. With new efforts like this we can move beyond existing programs and help encourage substantial private investment in projects that grow the economy and improve quality of life for millions of Americans."
"We're extremely pleased to join with USDA in this important initiative," said Robert B. Engel, CoBank's chief executive officer. "It will enhance access to capital for a wide array of vital infrastructure projects around the country and speed up the process of rural infrastructure improvements. It is completely aligned with our mission of service to rural America, and we believe it represents a meaningful long-term growth opportunity for CoBank and our partner organizations in the Farm Credit System. We look forward to seeing the benefits the fund will deliver to rural communities."
CoBank's co-investments with the fund are designed to complement existing government loan and grant programs. The fund's investment activities will include:
- Recruiting new sources of private capital to support rural infrastructure projects;
- Serving as a co-lender for borrowers financing projects where the government's program limits or resource constraints warrant the fund's involvement; and,
- Private lending in support of projects capable of meeting market terms.
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