AppHarvest has secured $50 million across two loans guaranteed by the U.S. Department of Agriculture through Greater Commercial Lending, a subsidiary of Greater Nevada Credit Union. The financing supports AppHarvest’s high-tech indoor berry farm in Somerset, Kentucky, which is about 84 percent complete and expected to be operational by years end.
“Securing non-dilutive sources of capital to fund our growth has been a top priority since going public early last year, and I’m pleased with our team’s ability to source lower-cost funding in a higher-cost lending environment,” said David Lee, AppHarvest president.
“This funding agreement with the USDA allows us to continue to scale operations as we plan to bring the Somerset farm and two additional controlled environment agriculture facilities online before the end of the year, which would quadruple our farm network and diversify our product portfolio to include berries and salad greens.”
The USDA guarantees 80 percent of the financing for the Somerset berry facility through its USDA Rural Development Business and Industry Initiative and the USDA Rural Development program. Each loan has a 23-year term with a rate that resets every five years based on the Federal Home Loan Bank five-year advance rate, plus 340 basis points and is interest-only for the first three years.
The financing closed on July 29. Some of the funds will be used by the company to satisfy an existing $46 million loan with J.P. Morgan that was used in part to fund the initial construction phase of AppHarvest’s Somerset farm.
AppHarvest is a sustainable food company in Appalachia developing and operating indoor farms with robotics and artificial intelligence to build a reliable, climate-resilient food system. AppHarvest’s farms grow produce using sunshine, rainwater and up to 90 percent less water than open-field growing, producing yields up to 30 times that of traditional agriculture and preventing pollution from agricultural runoff.
AppHarvest operates its flagship farm – about the size of 50 football fields – in Morehead, Kentucky, producing tomatoes. The company is developing a network of farms to produce a variety of vine crops, salad greens and berries with three more farms under construction that are expected to be operational by the end of 2022.
