The second stage of a 3 million fund for small scale farm anaerobic digestion has opened today (April 29) with praise from resource minister Dan Rogerson who believes it will encourage growth in the sector.
The On Farm Anaerobic Digestion (AD) Loan Fund is open to farmers in England who can apply for up to 400,000 per farm to build a small scale AD plant. This is the second stage of the loan, which is funded by Defra and managed by WRAP, which aims to support the construction of on-farm AD plants generating less than 250kW of energy by utilising farm waste such as manure and slurries.
The first stage launched in October 2013 (see letsrecycle.com story) which offered grants of up to 10,000 per farm to help farmers develop business plants for AD plants. This received nearly 400 enquiries.
The capital loan fund is designed to support farmers who are finding it difficult to obtain asset finance for such projects from the usual commercial sources, and comprises of a maximum loan per farm of 400,000, or 50% of the capital.
Commenting on the fund resource minister Dan Rogerson, said: The loans that are now available will encourage the anaerobic digestion sector to grow. This will strengthen local economies by producing local energy, cutting waste, reducing greenhouse gas emissions and recycling valuable nutrients back into the land.
Requirements
There are a number of requirements for the loan. They include:
- Lending amounts: 50,000 to 400,000;
- Farmers need to match the value of loan with finance from other sources;
- Interest rates for the loan vary between 3% 12% depending on the risk and the individual details of the project;
- Loan tenures are offered up to seven years and there are different repayment options available;
- The loan will be made available on a commercial basis and therefore does not conflict with eligibility to claim from incentives schemes such as FiTs; and
- It is not necessary to have been awarded an On Farm AD grant prior to applying for the loan – however a business plan must have been completed.
Dr Liz Goodwin, chief executive of WRAP, said: The On Farm AD Loan fund is to help farmers convert more of their farm waste into renewable energy and valuable fertilizer through the process of Anaerobic Digestion.
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Having a small scale facility on site will help farmers to improve their manure and slurry management and environmental controls, reduce greenhouse gas emissions and improve energy security. There are additional benefits from this approach as the digestion process makes the nutrients in farm wastes more readily available for crop uptake.
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