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Smartway Clean Diesel Finance Program
- What is the SmartWay Clean Diesel Finance Program?
- 2008 Smartway Clean Diesel Finance Grant Awards
- Who Can Apply?
- What is an Eligible Use of Funding?
- Project Examples
What is the SmartWay Clean Diesel Finance Program?
The SmartWay Clean Diesel Finance Program uses cooperative agreements to establish innovative finance programs for buyers of eligible diesel vehicles and equipment.
Innovative finance projects include those where the loan recipient receives a unique financial incentive (i.e., greater than regular market rates or conditions) for the purchase of eligible vehicles or equipment.
Particular emphasis is on establishing low cost loan programs for the retrofit of used pre-2007 highway vehicles (e.g., heavy-duty trucks) and new or used pieces of nonroad equipment (e.g., bulldozer) with EPA or California Air Resources Board verified emission control technologies.
2008 Smartway Clean Diesel Finance Grant Awards
| Award Recipient | Award | Project Overview |
|---|---|---|
|
Cascade Sierra Solutions |
$1.13M |
The EPA funds will serve as a security interest allowing Cascade Sierra Solutions to substantially expand its line of credit to $17.1 million that it will use to provide below-market interest rates loans. These loans will allow truck owners to install and lease SmartWay fuel saving technologies or EPA or CARB-verified emission reduction technologies. The goal is to install emission reduction technology and idle reduction technology on 1,700 trucks. |
|
Community Development Transportation Lending Services (CDTLS) |
$1.13M |
This project will create a revolving loan program. CDTLS will work with truck dealerships to offer low interest loans, ranging from 5.5% - 8.5%, and longer loan payback periods, ranging from three to six years, to qualified applicants who wish to purchase used trucks that are upgraded with SmartWay fuel savings idle reduction and/or emission reduction technology. The goal is to lend funds for the purchase of over 200 used trucks with complete SmartWay upgrades. |
|
Owner-Operator Independent Drivers Association (OOIDA) |
$1.13M |
The association will offer a financing package that includes below-market financing and rebates for emission reduction and idle reduction equipment on their trucks. OOIDA will also use the EPA funds as a security interest for their line of credit, which will allow them to offer loans to applications with lower FICO scores. |
This information is based on each grant recipient's proposed loan/lease program and is subject to change.
For loan application and contact information for these organizations, please visit EPA's Trucker Page.
Who Can Apply?
What is an Eligible Use of Funding?
Finance Program cooperative agreements are used to establish innovative financing. The financing must:
- Lower costs to the buyer by providing lower interest rates, longer repayment terms, greater approvability of loan, or some other financial incentive where the loan recipient receives a unique financial incentive (i.e., greater than regular market rates or conditions) for the eligible vehicle or equipment.
- Apply nationally or across multiple EPA regions to any eligible vehicle or equipment owner residing in the United States, its Territories, and Tribal Lands. In some cases, EPA Regions may also offer cooperative agreements for innovative finance programs under their solicitation of proposals. In the case of Regional solicitations, the grant recipient must limit their proposed innovative financing to eligible vehicle or equipment owners that reside in the Region’s States, Territories, or Tribal Lands. Note, there is no requirement in the Regional solicitations that the vehicles or equipment operate exclusively with the Region’s area.
Finance proposals may include, but are not limited to, the following:
- Issuance of loan guarantees
- Equity investments that leverage additional funds
- Issuance of tax exempt or taxable bonds to create a low-cost loan program
- Revolving loan funds
What Fleets Qualify?
The following types of vehicles and equipment qualify for funding:
- Buses
- Medium or heavy-duty trucks (particular emphasis on used pre-2007 heavy duty trucks)
- Marine vessels
- Locomotives
- Nonroad equipment, and vehicles used in construction
- Stationary generators and engines
- Cargo handling equipment (including at a port or airport)
- Agricultural equipment
- Mining equipment
- Energy production equipment
Project Examples
National
A national environmental group, partnering with a lending institution and used truck dealerships, establishes a low interest loan program for used, pre-2007 heavy-duty trucks retrofitted with an EPA verified emission control technology. The environmental group leverages additional funds by borrowing funds from another lending institution.
The lower interest rate comes from the blending of EPA funds (at 0 percent interest) and borrowed funds at lower market rates. Working with used truck dealerships, potential truck purchasers are offered a loan at lower interest rates if they select the retrofitted truck.
State
A State transportation agency, partnering with a State economic development agency and new/used construction equipment dealerships, issues a state bond that creates a low interest loan program for the purchase of new or used pieces of non-road construction equipment retrofitted with an EPA or California Air Resources Board verified emission control technology.
The State transportation agency uses the EPA award to create the bond initiative by paying for bond issuance fees, bond counsel and bank attorney fees, underwriter fees, trustee fees, and bond insurance. Once the bond receives sufficient investors, the funds are loaned through participating equipment dealerships. Potential equipment purchasers are given the choice to purchase the retrofitted equipment with a loan at a lower than market interest rate, or the traditional non-retrofitted equipment at a market based interest rate.