U.S. Department of Energy Energy Efficiency and Renewable Energy

Recovery Zone Economic Development Bonds

Recovery zone economic development bonds (RZEDBs) are a special class of Build America Bonds discussed above, but the credit amount is 45% of bond interest.

  • RZEDB proceeds, other than those in a reasonably required reserve fund, must be issued for promoting development or other economic activity in a recovery zone through capital expenditures, expenditures for public infrastructure and construction of public facilities, and job training and educational programs.

  • “Recovery zones” include (a) any area designated by an issuer as having significant poverty, unemployment, home foreclosures, or general distress; (b) existing empowerment zones or renewal communities; and (c) areas designated by an issuer as distressed by reason of the closure or realignment of a military installation pursuant to the Defense Base Closure and Realignment Act of 1990.

  • Private activity bonds, including 501(c)(3) bonds, are not eligible for the Recovery Zone Economic Development Bond provisions.

Application to Energy Financing Programs

Recovery Zone Economic Development Bonds could provide funding for projects to be owned by a public entity, but may not finance improvements owned by or for the direct benefit of private parties.