BILLINGS — The federal government is suspending a major loan program for coal-fired power plants in rural communities, saying the uncertainties of climate change and rising construction costs make the loans too risky.
After issuing $1.3 billion in loans for new plant construction since 2001, none will be issued this year and likely none in 2009, said James Newby, assistant administrator for the Rural Utilities Service, a branch of the Department of Agriculture.
The program’s suspension marks a dramatic reversal of a once-reliable source of new coal-plant financing. It follows the announcement last month that several major banks will require plant developers to factor in climate change when seeking private funding.
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