Renewable Energy Manufacturing Program

WEDFA is very excited to be teaming up with the Washington State Department of Commerce (Commerce) to offer the Renewable Energy Manufacturing Program. The program consists of two key ingredients: WEDFA Bonds and an interest cost subsidy on those bonds from Commerce.

PLEASE BE AWARE THAT PROJECTS MUST BE APPROVED FOR WEDFA FINANCING BEFORE THEY ARE ELIGIBLE FOR THE COMMERCE INTEREST COST SUBSIDY.

ALSO PLEASE NOTE THAT THE BORROWER IS RESPONSIBLE TO LOCATE AND RETAIN THE ULTIMATE SOURCE OF CREDIT ON THE TRANSACTION (MOST LIKELY A COMMERCIAL BANK). IN THE FIRST ROUND OF FINANCINGS UNDER THE PROGRAM, NO APPLICATIONS WILL BE CONSIDERED FOR THE COMMERCE INTEREST COST SUBSIDY AWARD UNLESS SUCH FINANCING HAS BEEN ARRANGED.

WEDFA BOND FINANCING

To qualify for WEDFA Bond financing, the project generally needs to be a manufacturing and energy production support facility. Bond may be either “tax-exempt” or “taxable”. Although the tax advantages of “tax-exempt” bonds only directly benefit the purchaser of the WEDFA bonds, the purchaser should be willing to offer a lower interest rate to the project, reducing the borrower’s debt service costs.

To qualify for tax-exempt financing, the borrower will need to meet the applicable federal tax requirements.  Click here to learn more.

TYPES OF PROJECTS ELIGIBLE FOR THE PROGRAM

The project must establish new or expand existing:

For purposes of this program, “renewable energy” includes but is not limited to:

In order to qualify for this competitive award, the manufacturing project must first be chosen to receive economic development bonds, to be issued and sold by WEDFA and financed with loans made by private lenders to the owners of the facilities financed with the bonds. Once this requirement is met, the project can be considered for the competitively awarded interest cost subsidy to be paid to borrowers from Commerce. The interest cost subsidy will reimburse borrowers for up to the lessor of $3 million or 80% of the interest due on the qualifying loan.

For those projects awarded the interest cost subsidy, award payment will be received on a monthly basis until the total amount of the award has been paid to the project. Each month Commerce’s program manager or a designated third party will confirm that:

Once these two conditions have been satisfied, Commerce will release payment to the borrower in the amount equal to the interest paid for the month in question. This will continue until the full amount of the award has been paid to the borrower.

Commerce and WEDFA will accept applications on a rolling basis. The first application deadline will be June 30, 2016, at which time all applications received to this point will be subject to a scored review and award decision. If Commerce has funds available for the interest subsidy after awards from the June application deadline, applications will continue to be accepted and reviewed for award on September 30, 2016, and December 21, 2016, if required. Commerce reserves the right to change some program parameters to impact program utilization.

ADDITIONAL PROJECT REQUIREMENTS AND PARAMETERS

  1. Minimum loan size of $2,000,000.
  2. Borrower must be able to offer credit and security of a quality which would permit the borrower to obtain a bank loan for the project.
  3. The private sector lending source must charge market interest rates through the entire loan term.
  4. Financed assets must have a useful life of at least 13 years.
  5. The project must be located within Washington State.
  6. The project must include creation or retention of Washington jobs.
  7. Successful projects will be required to fulfill due diligence and disclosure requirements set from in HB 1115 Section 1028(2)(3).
  8. Applicant must identify any state of Washington employees or former state employees employed or on the firm's governing board during the past twenty-four months. Application materials must identify the individual by name, the agency previously or currently employed by, job title or position held, and separation date.
  9. Maximum interest reimbursement payments from Commerce will be the lesser of $3,000,000 per project OR 80% of the total loan interest owed. Commerce makes the final decision on award amounts.
  10. Subsidy reimburses all debt service cost until the subsidy award for the project is fully expended. If a project is not performing as agreed, Commerce shall reserve the right to withhold future interest payments from the approved award until either the project is brought back on track to the satisfaction of Commerce or Commerce determines the project has failed to meet its original goals. Commerce also will retain certain limited recapture rights for the funds.
  11. Interest cost reimbursement payments from Commerce to the borrower are subject to the ordinary appropriations process in the state legislature in future biennial periods.

APPLYING FOR RENEWABLE ENERGY MANUFACTURING PROGRAM FINANCING

To qualify for financing, please Click here.

FIND OUT MORE FROM COMMERCE

Click here.

CONTACT WEDFA FOR ADDITIONAL INFORMATION

Click here.