en.Wedoany.com Reported - The USDA's Rural Business Cooperative Service announced in an internal letter on April 6th that it is extending the pause on loan note guarantees for biogas digester projects until the end of 2026. The agency first implemented a 90-day pause in January of this year, citing the need for a comprehensive review of its existing project portfolio.

Data shows the pause stems from high default risks. Out of 21 anaerobic digester loans totaling $386.4 million, $102.6 million are delinquent, accounting for 27%. In the letter, Administrator JR Kless noted that the review revealed "persistent and significant risk" within the portfolio, including rapid project expansion, insufficient lender underwriting expertise, and deteriorating cash flows. Currently, 12 biogas digester projects are still under construction, and 5 applications are under review. Lenders associated with one-third of the projects have been suspended or are undergoing audits.

The extension aims to allow time to develop industry-specific underwriting guidelines. Kless stated that the extension will be used to evaluate lender qualifications, enhance collateral assessment and loss mitigation expectations, ensuring future approvals align with sustainable and fiscally responsible practices. The agency will complete a full performance evaluation once construction projects become operational and will strengthen project safeguards to protect its interests.

Furthermore, the letter also extends the restriction period for Controlled Environment Agriculture (CEA) projects. Restrictions on the acceptance, processing, and awarding of loan guarantee applications for projects involving technologies like vertical farming, hydroponics, aeroponics, and aquaponics will also remain in place until the end of 2026.

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