Financing Rural Electric Generating Facilities

A Large and Growing Activity Gao ID: CED-81-14 November 28, 1980

The Rural Electrification Administration (REA), through insured and guaranteed loans, makes available billions of dollars in financing to construct electric generating and transmitting facilities to meet the increasing demands for electricity in rural areas.

To gain better budgeting control and increase private credit involvement, GAO believes that changes are needed in how this financing is budgeted for and funded. In making and guaranteeing loans, the prime concern of REA must be the borrower's ability to repay the loans. The agency has little funding flexibility to finance demonstration projects, studies, or programs designed to solve the Nation's energy problems. Other organizations are funding such efforts. REA should act as a catalyst by evaluating and disseminating information about these studies and projects to its borrowers. REA may wish to seek broader funding authority to conduct its own demonstration projects.


Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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