Biofuels PACE Program

Biofuels PACE Program provides interest buydown on loans to biodiesel, ethanol or green diesel production facilities and livestock operations. The program is used to reduce the interest rate on loans which have been approved by a local lender and BND. There is no community match required for the interest buydown.

In order to qualify, the facility must be located in North Dakota.

Ethanol production criteria

  • Facility must produce agriculturally-derived denatured ethanol
  • Fuel must be suitable for blending with a petroleum product for use in internal combustion engines

Biodiesel production criteria

  • Facility must produce biodegradable, combustible liquid fuel derived from vegetable oil or animal fat
  • Fuel must be suitable for blending with diesel fuel for use in internal combustion engines

Green diesel production criteria

  • Facility must produce fuel derived from non-fossil renewable resources
  • Fuel must be suitable for blending with diesel fuel for use in internal combustion diesel engines

Value-added livestock operations criteria

  • Value-added operations include a producer that engages in dairy and milking or feeding of animals or poultry which enhances the value before sale into the marketplace.

Funds may be used for:

  • Purchase or construct real property
  • Expand facilities
  • Purchase or install equipment including a biodigester system

Biofuels PACE recipients are not eligible for regular PACE funds for the same project.  Loan funds may not be used to refinance any existing debt or for relocation within the state.

The total loan amount may not exceed the cost of the project.

Interest rate: A fixed or variable interest rate may be used in the loan participation. The interest rate to the borrower may be as much as 5% below rate on the promissory note, but not less than 5% below Prime rate with a floor of 1%.

Fees: $250 minimum origination fee

BND uses its typical credit standards in reviewing the loan. These standards include loan size and type of project.

Equity requirements:

  • Ethanol, biodiesel or green diesel: 40-50% equity
  • Value-added livestock operations: 40% equity

Adequate collateral will be required.

Appraisal requirements evaluated on a case-by-case basis.

BND is required to take at least 50 percent, and not more than 80 percent, of the total loan. Borrower must work with a local lender to submit the loan application. Lead lender is responsible for servicing the loan.

Maximum buydown amount for ethanol production, biodiesel production and green diesel production is $500,000. When utilized for value-added livestock operations, the maximum buydown is $250,000 to any single livestock operation.

Ethanol, biodiesel or green diesel facility

  • Equipment: 5-7 years
  • Real estate: Up to 20 years

Value-added livestock operation

  • Equipment: 5-7 years
  • Real estate: 12-15 years

If the borrower is in default under the loan agreements, the interest rate on the loan changes from the borrowing rate to the yield rate. The borrower shall accrue interest at the yield rate and all interest buydown is suspended until the loan is brought current.

Bank Participation Loan Application (PDF)
Loan Renewal Application for Existing Participations (PDF)

PDFs will automatically download. Once downloaded, on desktop PC, right-click the file name in browser’s default download location, select “Show in folder,” open PDF. If you are not able to access a PDF, please contact us for assistance.

BND offers this loan by partnering with local lenders. To apply, contact your lender.

If you have any questions, contact us or call 701.328.5795.