42 USC 8814 - Loan guarantees

U.S Code last checked for updates: May 01, 2024

§ 8814.

Loan guarantees

(a)

Authority of Secretary concerned

(b)

Estimated project construction costs as determinative of initial and revised amount of guarantee

(1)

Any guarantee of a loan under this section may not exceed 90 per centum of the cost of the construction of the biomass energy project involved, as estimated by the Secretary on the date of the guarantee or commitment to guarantee.

(2)

In the event the construction costs of the project are thereafter estimated by the Secretary concerned to exceed the construction costs initially estimated by the Secretary, the Secretary may in addition, upon application therefor, guarantee, against loss of principal and interest, a loan for up to 60 per centum of the difference between the construction costs then estimated and the construction costs initially estimated.

(c)

Debt obligation; ineligibility for purchase, etc., by Federal Financing Bank or any Federal agency

(d)

Terms and conditions

(e)

Termination, cancellation, or revocation, and conclusive nature of guarantee

(f)

Payment to lender

If the Secretary concerned determines that—

(1)

the borrower is unable to meet payments and is not in default,

(2)

it is in the public interest to permit the borrower to continue with such project, and

(3)

the probable net benefit to the United States in paying the principal and interest due under the loan will be greater than that which would result in the event of a default,

then the Secretary may pay to the lender under a loan guarantee agreement an amount not greater than the principal and interest which the borrower is obligated to pay to such lender, if the borrower agrees to reimburse the Secretary for such payment on terms and conditions, including interest, which the Secretary determines are sufficient to protect the financial interests of the United States.

(g)

Preconditions

(1)

A loan may not be guaranteed under this section unless the applicant for such loan has established to the satisfaction of the Secretary concerned that the lender is not willing without such a guarantee to extend credit to the applicant at reasonable rates and terms, taking into consideration prevailing rates and terms for loans for similar purposes and periods of time, to finance the construction of the biomass energy project for which such loan is sought.

(2)

The Secretary concerned shall ensure that the lender bears a reasonable degree of risk in the financing of such project.

(Pub. L. 96–294, title II § 214, June 30, 1980, 94 Stat. 690.)

cite as: 42 USC 8814