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On Friday, the Federal Railroad Administration (FRA) announced that Iowa Interstate Railroad Ltd. (IAIS) will receive a $31 million Railroad Rehabilitation and Improvement Financing (RRIF) program loan — just the third RRIF loan issued this year and IAIS' third loan since 2005.

The 550-mile regional will use proceeds to purchase 12 new locomotives to increase train lengths, tonnage and operating speeds, and provide service for newly constructed ethanol plants. The locomotives are more fuel efficient and produce fewer emissions than IAIS' older motive power.

Under the RRIF program, the FRA is authorized to provide direct loans and loan guarantees up to $35 billion — with $7 billion set aside for regionals and short lines — to eligible applicants to acquire, improve or rehabilitate intermodal or rail equipment or facilities; refinance outstanding debt incurred for those purposes; or develop or establish new intermodal or rail facilities. Eligible borrowers include railroads, state and local governments, government-sponsored authorities and corporations, and joint ventures that include at least one railroad.

IAIS previously obtained a $32.7 million RRIF loan in 2005 and a $9.35 million loan in 2006. Earlier this year, the FRA issued a $4.6 million loan to the Nashville and Eastern Railroad and a $3 million loan to Columbia Basin Railroad. Since 2002, the FRA has approved a total of 22 RRIF loans (including IAIS' third).