Methane Digester Loan Program

Established in 1998, the Minnesota Dept. of Agriculture Methane Digester Loan Program helps livestock producers install on-farm anaerobic digesters used for the production of electricity by providing zero-interest loans to eligible borrowers. The loan program is part of the Rural Finance Authority (RFA) revolving loan fund, through which farmers can receive financial aid for many different farming related activities and improvements. The general eligibility requirements for loans through the RFA are contained in Minn. Stat. § 41B.03, which permits loans only to Minnesota residents, domestic family-farm corporations, and family-farm partnerships. The methane digester loan program is specifically authorized by Minn. Stat. § 41B.049. In order to be eligible for a Methane Digester Loan, a borrower must: locate the projects and utilize the equipment and practices on land located in Minnesota; provide evidence of financial stability; demonstrate an ability to repay the loan; and provide evidence that the practices implemented and capital assets purchased will be properly managed and maintained. Additionally, a borrower who has previously received a loan under this program may receive another methane digester loan if the previous loan has been repaid in full. Within the Methane Digester Loan Program, the RFA may make a direct loan to the borrower or act as a participant in the loan with an eligible lender (more than 400 such approved lenders exist throughout the state). Loans may not exceed $250,000 for either participation or direct loans. The loan term is limited to a maximum of 10 years and repayment terms for the RFA's participation interest may differ from those of the outside lender. Loans can be used as a match for federal loans and grants, but may not be used to refinance a debt existing prior to the application.