Obama Administration Gives More Than $600M in Loan Guarantees to 4 Biofuel Companies

Date: January 21, 2011

Source: News Room

The US Department of Agriculture has awarded $600 million in loan guarantees to a quartet of biofuel companies that produce fuel from wood chips, municipal waste, cooking oil and other sources. The loans are meant to help the companies get to commercial scale production amid the difficult financial markets and to help the industry meet government set mandates for how much ethanol must be blended with petroleum under national renewable fuel standards. The largest recipient was Coskata Inc., which received $250 million for a cellulosic ethanol facility it is building in Green County, Alabama that will produce 55 million gallons of ethanol annually from woody biomass. The company is backed by Khosla Ventures,, Blackstone Group and GM, among others. The second largest guarantee, $240 million, went to Diamond Green Diesel LLC, a joint venture between the refining company Valero Energy Corp. and Darling International Inc., a food waste recycling company. Based in Louisiana, Diamond Green will produce 137 million gallons of biodiesel per year from animal fats, used cooking oil and other grease wastes. Montreal-based Enerkem earned an $80 million loan guarantee for a 10 million gallon-per-year plant in Pontotoc, Miss. that will use municipal solid waste as a feedstock to turn into biofuels. The company also received a $50 million award from the Department of Energy for the same plant in 2009. Enerkem's investors include Rho Ventures, Braemar Ventures and Waste Management, Inc. Another company, INEOS New Planet BioEnergy LLC, received a $75 million loan guarantee for a biorefinery in Vero Beach, Fla. capable of producing 8 million gallons per year of cellulosic ethanol, using vegetative waste like citrus, agricultural, yard, wood and municipal solid waste. Ineos is a spinoff from its parent company, chemicals player Ineos.

All companies have to meet certain conditions before completing the loan guarantees.

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