FOR IMMEDIATE RELEASE
ICBA Highlights Community Banks’ Role in Alternative Fuels Financing
Survey: Nearly 80 Percent of Community Banks Want to Finance Ethanol & Alternative Fuels Projects
Washington, D.C. (March 7, 2007)—The Independent Community Bankers of America (ICBA) told Congress that community banks are actively involved in financing ethanol and other alternative fuels projects. Community banks, both individually and through alliances with other community banks, actively finance alternative fuels projects and farmers investments in these projects. ICBA urged lawmakers to ensure community banks can continue their involvement in financing alternative fuels and encouraged more research dollars for development of alternative fuels, particularly cellulosic ethanol.
"Our nation's community banks play an integral part in the economic well-being of the communities they serve," said Dave Reyher, president of Colorado East Bank and Trust, Lamar, Colo., testifying before a House Agriculture Committee panel on behalf of ICBA. "They are the backbone for economic development in their communities. Financing alternative fuels projects provides much needed jobs, promotes economic diversification in agricultural-based areas and reduces our nation's reliance on foreign oil. For these reasons, community banks are actively involved in bringing renewable fuel facilities to their local communities through loans and working capital for plants and facilities and loans to finance farmer investments in renewable fuel companies," added Reyher.
Investments financed by community banks help bring renewable fuel facilities to communities and support local ownership and control of these facilities. Through these investments farmers reap the rewards of value-added agricultural endeavors. ICBA has endorsed the 25 x'25 Alliance, which promotes the goal of producing 25 percent of the nation's energy from domestic renewable sources by 2025.
Reyher told the subcommittee that community banks have formed a variety of alliances that allow them to finance ethanol projects even though the cost of these projects is often enormous and often exceeds the lending limits of individual community banks. Examples of such alliances include working with underwriting, originator and placement agents to community banks, working with other community banks through informal networks, and working with bankers' banks or larger correspondent banks. These loan participation mechanisms allow individual banks to each share in a portion of the financing and diversify risks to bring these projects to life in local communities.
Reyher told Congress that nearly 80 percent of a random sample of community bankers who responded to an ICBA survey already finance renewable fuel projects or are considering it. Read the testimony at www.icba.org.