U.S. Department of Agriculture: Rural eConnectivity Pilot Program (ReConnect Program)
The Rural eConnectivity Pilot Program (ReConnect Program) provides grants, loans, and loan/grant combinations to facilitate broadband deployment in rural areas. In facilitating the expansion of broadband services and infrastructure, ReConnect will fuel long-term rural economic development and opportunities in rural America.
One of the essential goals of the ReConnect Program is to expand broadband service to rural areas without sufficient broadband access, defined as 10 megabits per second (Mbps) downstream and 1 Mbps upstream. The first round of applicants have three separate funding categories to choose from: 100% grant, 50% grant/50% loan, or 100% loan.
Eligible funding purposes include:
- To fund the construction or improvement of buildings, land, and other facilities that are required to provide broadband service
- To fund reasonable pre-application expenses
- To fund the acquisition and improvement of an existing system that is currently providing insufficient broadband service (eligible for 100% loan requests only)
- To fund terrestrial based facilities that support the provision of satellite broadband service
Amount: A total of $600,000,000 is available. Award amounts are as follows:
- 100% grant: Up to $200,000,000 is available to fund projects that range up to $25,000,000 each.
- 50% grant/50% loan: Up to $200,000,000 is available for loan/grant combinations. The maximum amount that can be requested in an application is $25,000,000 for the loan and $25,000,000 for the grant. Loan and grant amounts will always be equal.
- 100% loan: Up to $200,000,000 is available for loans that range up to $50,000,000 each.
Award period: While the completion time will vary depending on the complexity of the project, award recipients must complete construction of their projects within 5 years from the date funds are first made available.
Eligibility: Only projects that are determined to be financially feasible and sustainable will be eligible for an award. An eligible project must demonstrate a positive ending cash balance as reflected on the cash flow statement for each year of the forecast period and demonstrate positive cash flow from operations in year five of the forecast period. Eligible projects must also meet at least two of the following requirements in year five of the forecast period: a minimum Times Interest Earned Ratio (TIER) requirement of 1.20, a minimum Debt Service Coverage Ratio (DSCR) requirement of 1.20, and a minimum Current Ratio of 1.20. If an applicant has no existing debt, is not applying for any loans from this program or proposing to borrow funds from any other fund sources during the forecast period, and is applying only for grant funds, only the Current Ratio will be applied and not the TIER or DSCR. For this situation, applicants must meet the minimum Current Ratio requirement of 1.20. Contact the USDA General Field Representative for New Mexico (hyperlink: https://www.rd.usda.gov/contact-us/telecom-gfr) to answer further eligibility questions.
Additionally, to be eligible for a 100% grant, the proposed funded service area in an application must be in a rural area where 100% of the households do not have sufficient broadband access. To be eligible for a 100% loan or 50% loan/50% grant, the proposed funded service area in an application must be in a rural area where 90% of the households do not have sufficient broadband access. No matter which funding type the applicant requests, the proposed network must be capable of providing service to every premise in the proposed funded service area at a speed of, at minimum, 25 Mbps downstream and 3 Mbps upstream.
Note: The deadline date given above is for applicants requesting 100% grant funding. There are different deadlines for applicants requesting funding for 50% grant/50% loan and 100% loans:
- 50% grant/50% loan: May 29, 2019
- 100% loan: Loan-only projects will be evaluated on a first-come-first-serve basis, beginning in March 2019
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