USDA Guarantees $115.2 Million to Expand Timber Production

CALIFORNIA — The U.S. Department of Agriculture Rural Development announced $115.2 million in loan guarantees on March 23 through the Timber Production Expansion Guaranteed Loan Program. The program operates as a partnership between USDA Rural Development and the U.S. Forest Service. Qualified lenders receive guarantees on loans made to businesses that establish, reopen, expand, or improve sawmills and other wood processing facilities. Eligible facilities must process ecosystem restoration byproducts removed from National Forest System lands. Projects align with goals to reduce wildfire fuel loads by creating markets for cleared vegetation while expanding domestic timber capacity.

California received the largest allocation, $61.25 million, for three projects. Northern California counties secured two awards. Alpenglow Timber LLC obtained an $18.5 million guarantee to establish a small-scale sawmill in Truckee in Nevada County. Funds will cover the construction of buildings, related infrastructure, and the purchase of equipment at the site with the physical address 10375 Silverado Way. Alpenglow Timber LLC holds contracts with the U.S. Forest Service to cut and remove wildfire-damaged timber from high-priority restoration areas.

Blue Mountain Electric Company LLC secured a $25 million guarantee for the construction and operation of a 3-megawatt gasification plant in Wilseyville in Calaveras County. The facility will convert forestry biomass waste into synthetic natural gas through thermochemical conversion processes. Total project costs reach approximately $42.2 million. Sources beyond the guarantee include $12 million in subordinated debt, $5.1 million in grants, and cash contributions. USDA funds support construction costs exceeding $19 million plus working capital, interest reserves, debt service reserves, and closing costs.

Sierra Forest Products Holdings Inc. received a $17.75 million guarantee to expand and improve an existing sawmill operation in Terra Bella. All California projects maintain U.S. Forest Service contracts for timber removal from designated high-priority zones.

Rural Business Cooperative Service Administrator J.R. Claeys said, “We cannot allow wildfires to devastate and destroy our rural communities.” He added, “That’s why the USDA is taking this bold action to stop the destruction of our forestlands by investing in sawmills and wood processing facilities that support sustainable timber harvesting.” U.S. Forest Service Chief Tom Schultz stated, “The American forest products industry is critical to maintaining the health of the nation’s forests.” He noted that the Timber Production Expansion Guaranteed Loan Program serves as one of many ways the Forest Service partners with the timber industry to maintain rural jobs, processing facilities, and an outlet for wood that needs to be removed from national forests.