IGU Authorized for Short Term Financing
$8.1 million authorized under SB 23 loan program
Fairbanks, AK – The Interior Gas Utility was authorized $8.1 million from the SETS program from the Alaska Industrial Development and Export Authority (AIDEA) board of directors Thursday, April 3, 2014. The IGU’s proposed gas distribution project qualifies for the loan under the SETS program set in Senate Bill 23 for initial development work.
“The funding available under SB 23 allows AIDEA to be flexible with funding options to reach the community goal of gas delivery of $15 per mcf,” said Bob Shefchik, IGU Board Chair. “We appreciate the leadership of Governor Parnell and the Interior Delegation in establishing and authorizing the program that makes this project possible.”
The loan terms allow a 0% interest for 20 months and a term negotiation agreement deadline set for December 20, 2015. If final terms are not agreed upon by this date, the loan terms change to 3% for 40 years.
Long term financing negotiations will be the next step for the IGU.
Proposed schedules from the IGU begin construction in the downtown North Pole area as soon as the summer of 2015. The project is estimated to reduce heating bills by 30-50% and air pollution by 14-30% within three years. A recent economic impact analysis released by AIDEA projects at least 350 construction jobs per year and employee income in this sector to reach $25 million.
“The IGU remains focused on staying on schedule and to deliver affordable natural gas to the most people as soon as possible,” said General Manager Steve Haagenson. “The state loan fund structure is there to help make that a reality.”
The Borough created the IGU in November 2012 after the Cities of Fairbanks and North Pole transferred legal authority to the Borough to create a public utility in the best interest of the community. The IGU Board meets every first and third Tuesday, and meetings are open to the public. Schedules and minutes can be found on the FNSB website, fnsb.us.
For the latest documentation and progress of the IGU, visit interiorgas.com.