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Smartway Clean Diesel Finance Program
The SmartWay Clean Diesel Program allows EPA to issue competitive grants to establish national low-cost revolving loans or other financing programs that will provide funding to fleets to reduce diesel emissions.
Overview
In 2009, EPA’s National Clean Diesel Campaign is distributing funding for the SmartWay Clean Diesel Finance Program through two separate funding sources:
- the American Recovery and Reinvestment Act of 2009 (Recovery Act) ($30 Million), and
- EPA’s Fiscal Year (FY) 2009 Appropriations.
An expedited process is currently underway for distribution of the Recovery Act funding. The distribution of the FY 2009 Funding will occur later in 2009.
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 and new or used pieces of nonroad equipment with EPA or California Air Resources Board verified emission control technologies.
Eligible Applicants
- U.S. regional, State, local or tribal agencies or port authorities with jurisdiction over transportation or air quality
- Nonprofit organizations or institutions that:
- represent or provide pollution reduction or educational services to persons or organizations that own or operate diesel fleets; or
- have, as their principal purpose, the promotion of transportation or air quality
School districts, municipalities, metropolitan planning organizations (MPOs), cities and counties are all eligible entities under this assistance agreement program to the extent that they fall within the definition above.
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 likelihood of loan approval, 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
Vehicles and Equipment Eligible for Financing
Applicants for the SmartWay Clean Diesel Finance Program may propose innovative financing programs for the purchase or retrofit of the following types of vehicles and equipment:
- Buses
- Medium or heavy duty trucks
- Marine engines
- Locomotives
- Non-road engines or vehicles used in:
- construction
- handling of cargo (including at a port or airport)
- agriculture
- mining
- energy production (including stationary generators and pumps)
Particular emphasis is on establishing low cost loan programs for the retrofit of used pre-2007 highway vehicles and new or used pieces of nonroad equipment with EPA or California Air Resources Board verified emission control technologies.