White House Announces $10 Billion Fund for Rural Development

The White House Rural Council has launched a $10 billion rural economic development fund. This launch was announced last Thursday at the Rural Opportunity Investment Conference held in Washington D.C. CoBank, a Denver-based national cooperative bank, serves as the anchor investor of the fund that will be managed by Capitol Peak Asset Management. Capitol will also recruit additional institutional investors to the fund including pension funds, endowments, and foundations that are interested in investing in rural areas.

The U.S. Department of Agriculture (USDA) and other agencies will assist in the identification of rural projects in need of funding. They are taking particular interest in investing in rural healthcare facilities, educational facilities, water and wastewater systems, energy projects, broadband expansion efforts, and local and regional food systems. These projects can be funded wholly by private sector dollars or can be the result of public-private partnerships.

Tom Vilsach, secretary of Agriculture and chair of the Rural Council, said, “This fund represents a new approach to our support for job-creating projects across the country.” He later continued, “We know where investment opportunities exist, so we are in a position to help promote these projects among investors. With new efforts like this, we can move beyond existing programs and help encourage substantial private investment in projects that grow the economy and improve quality of life for millions of Americans."

Vilsach also announced other initiatives that are in the same vain as the fund. The Rural Business Investment Company now facilitates private equity investments in agriculture-related businesses. This $150 million equity fund, established in April, is supported by nine Farm Credit institutions and managed by Advantage Capital Agribusiness Partners. Small businesses now have access to equity support that was previously absent from USDA’s financing programs.

Other new or expanded initiatives announced at the conference include a $9.9 million rural healthcare improvement initiative; the Rural Entrepreneurship Initiative; a $1.2 billion investment by the USDA's Regional Conservation Partnership Program in natural resource conservation; and a $5 million funding challenge from the Rural Health Philanthropy Partnership. The White House sent a message of continued support for rural development while highlighting its efforts over the last two years to express this support through financial commitments.

These new funds present an opportunity for technology and innovation businesses that are geared toward one or more of the targeted areas mentioned. Technologies involving improvements in health, energy production, water provision, and broadband communication have long been an interest of the TBED community. The White House Rural Council is now invested in these improvements as well and it may make a worthwhile partner.