New $10bn infra fund for rural America

The White House Rural Council has announced the creation of the US Rural Infrastructure Opportunity Fund that will invest in hospitals, schools, water and wastewater systems, energy projects, broadband expansion, local and regional food systems and other infrastructure across rural communities in the US. The announcement was made at the Council’s first-ever Rural Opportunity Investment (ROI) Conference in Washington DC.

CoBank, a national cooperative bank serving rural communities and a member of the Farm Credit System, is the fund’s anchor investor, having committed $10 billion, the US Department of Agriculture (USDA) said in a statement.

Washington DC-based Capitol Peak Asset Management will manage the fund and will look to attract more investors, including pension funds, endowments, foundations, and other institutional investors while the USDA and other federal agencies will help identify appropriate rural projects.

“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,” said Tom Vilsack, USDA Secretary and Chair of the White House Rural Council.

“With new efforts like this we can move beyond existing programmes and help encourage substantial private investment in projects that grow the economy and improve quality of life for millions of Americans,” he said.

Projects may be funded entirely through private capital. Alternatively, private dollars may leverage and extend critical government loan and grant programmes, according to a White House fact sheet on the initiative.

The ROI conference and new infrastructure fund are part of the Obama administration’s ongoing efforts to promote investment in rural America, strengthen the country’s infrastructure and grow the US economy, according to the fact sheet.

President Barack Obama created the White House Rural Council by executive order in June 2011. The council was created in order “to better coordinate Federal programmes and maximise the impact of Federal investment to promote economic prosperity and quality of life in our rural communities”.

Obama has pushed for investment in the country’s infrastructure throughout most of his term both as a means to create jobs and grow the economy as well as to boost the country’s competitiveness. In late February, he included $302 billion in his proposed budget to be invested in the country’s transportation sector over the next four years.

Earlier this month, the President announced an executive action to create the Build America Investment Initiative, a government-wide initiative to increase infrastructure investment and economic growth.

While this initiative will not provide funding for infrastructure projects, it seeks to facilitate cooperation between the public and private sectors. Part of the initiative includes the Build America Transportation Investment Centre, which will be housed at the Department of Transportation (DOT). The centre will make DOT credit programmes more understandable and accessible to states and local governments and leverage both public and private funding to support ambitious projects, according to a White House statement.

The center will also provide private sector developers and infrastructure investors with tools and resources to identify and execute successful public-private partnerships (PPP; P3). It will provide technical assistance by sharing best practices from states that have used PPPs successfully to finance infrastructure projects and will work with the interagency Infrastructure Permitting Improvement centre to provide visibility for local and state governments, project sponsors and investors on the permitting process, according to the statement.