Rural economic development program celebrates 10 years, 133 loans

Mar. 7 , 2006

What regional economic development loan fund has made 133 loans for $26 million to small communities, businesses and agricultural projects in the region during its first 10 years?

The answer is the Rural Electric Economic Development (REED) Fund. The REED Fund, which is operated by 21 electric cooperatives, recently released its 2005 Annual Report, totaling many accomplishments since organized in 1996.

Back in the mid-1990s, a handful of electric cooperatives in eastern South Dakota and western Minnesota, pooled a few thousand dollars each in investment capital to help grow their local economies.

Today, REED's investment capital comes from eight sources of funding, including the U.S. Department of Agriculture, other federal programs, and private foundations. REED has partnered with more than 100 banks/loan funds, and other state/federal programs. Loans are made to help finance projects that improve community infrastructure, add value to agriculture, and assist businesses involved in retail, service and tourism.

During 2005, REED issued 15 loans for nearly $5 million. Last year, REED Fund loans helped to build a community center, purchase equipment for agriculture, expand agronomy services and assist retail, service and manufacturing businesses to grow. These loans leveraged nearly $74.5 million in total investments in the region, and created or retained jobs for 300 people.

"Your local Touchstone Energy Cooperative is proud to be part of the REED program, which helps finance community improvement projects, new start-up businesses, expanding companies and ag-related businesses," said REED Fund Administrator Linda Salmonson. "Since 1996, REED projects resulted in more than $200 million of total investments by all parties in these projects, which developed, retained or attracted more than 3,600 jobs during the past 10 years."

Touchstone Energy Cooperatives show their commitment to their communities by helping to develop or expand businesses and industries that help sustain and enhance our local economy, Salmonson said. Also, REED financing assists non-profit organizations to build infrastructure for improving the health, safety and quality of life in these communities.

Salmonson and her staff at the Madison, S.D.-based REED Fund will be busy during 2006. Loan commitments have been made for projects involving technology, health-care and agricultural processing. The REED Fund is currently considering requests for financial assistance from a number of prospective projects in the region.

For information on REED loans, contact your local electric cooperative.

View the REED Fund Annual Report online at www.eastriver.coop.

REED Fund Loan Facts 1996-2005

133 loans issued totaling nearly $26 million
$200 million in total investment by all parties
88 percent to communities under 4,000 population
95 percent of loans to locally-owned projects
36 percent of loans are for start-up businesses
69 percent of borrowers employ less than 20
3,600 jobs assisted, average wage $13.40/hour
35 percent new jobs & 65 percent retained
25 ag processing/agribusiness loans $10.2 million
45 community development loans $7.8 million
63 business and industry loans $7.6 million
21 Touchstone Energy Cooperatives operate the fund