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Soon, Iowa Northern Railway Co. will close on the second Railroad Rehabilitation and Improvement Financing (RRIF) program loan to be approved by the Federal Railroad Administration this year.

The short line recently announced the administration gave the thumbs up to a $25.5 million loan. The railroad will close on the loan in 15 to 30 days, says Iowa Northern Director of Administration Joshua Sabin.

Iowa Northern will use loan proceeds to help fund upgrades to the majority of its 163-mile line. During the next six years, the short line plans to spend about $60 million to upgrade track and improve facilities. The railroad also will take delivery of additional locomotives and rail cars within the next six months.

Iowa Northern needs to improve infrastructure and expand capacity to accommodate growing ethanol business, said President Dan Sabin in a prepared statement.

“With grain yields at an all-time high and the booming biofuels market, we’re in need of strong infrastructure to handle the increased traffic,” he said.

The short line expects to move more ethanol-related carloads in April 2007, when Manly Terminal L.L.C. completes an ethanol trading and distribution center on Iowa Northern’s line in Manly, Iowa. Last week, Manly Terminal broke ground for the truck-to-rail facility, which will have the capacity to store 20 million gallons of ethanol for several producers.

The only other RRIF loan approved by the FRA this year went to another Iowa small road. In February, Iowa Interstate Railroad Ltd. obtained a $9.35 million loan to purchase 22 GP-38-2 locomotives from GATX Rail.