Loans of up to £400,000 per farm are available from today in a new initiative to help farmers in England who want to build small-scale AD plants on their farms.
They are available from the On Farm Anaerobic Digestion (AD) Loan Fund of as part of a £3 million initiative administered by the government-funded Waste Resources Action Programme (WRAP).
The first stage of the Fund, which was launched in October 2013, offers grants of up to £10,000 per farm to help farmers develop business plans for on-farm AD projects. This has already received nearly 400 enquiries.
The second stage is a loan, funded by Defra and managed by WRAP, which aims to support the construction of on-farm AD plants generating less than 250kW of energy, and which will utilise farm waste such as manures and slurries.
“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,” said a spokesman for WRAP.
He explained that the lending amounts varied from £50,000 to £400,000 and farmers would need to match the value of loan with finance from other sources. Interest rates would vary between 3% – 12% depending on the risk and the individual details of the project.
Different repayment options were available and they would not conflict with eligibility to claim from incentives schemes such as the Feed-In Tariffs (FITs.
UK environment minister Dan Rogerson said he hoped the loans would 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,” he added.