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USDA announces availability of $181M to support development of advanced biofuels projects
21 October 2013
US Department of Agriculture Secretary Tom Vilsack announced the availability of $181 million via its Biorefinery Assistance Program to develop commercial-scale biorefineries or retrofit existing facilities with appropriate technology to develop advanced biofuels.
The Biorefinery Assistance Program was created through the 2008 Farm Bill and is administered by USDA Rural Development. It provides loan guarantees to viable commercial-scale facilities to develop new and emerging technologies for advanced biofuels. Eligible entities include Indian tribes, State or local governments, corporations, farmer co-ops, agricultural producer associations, higher education institutions, rural electric co-ops, public power entities or consortiums of any of the above.
To be eligible for the program, a technology must be adopted in a viable commercial-scale operation or demonstrated to have technical and economic potential for commercial application in a biorefinery that produces an advanced biofuel.
Advanced biofuels are fuels derived from renewable biomass, other than corn kernel starch, and include:
Biofuel derived from cellulose, hemicellulose, or lignin;
Biofuel derived from sugar and starch (other than ethanol derived from corn kernel starch);
Biofuel derived from waste material, including crop residue, other vegetative waste material, animal waste, food waste, and yard waste;
Diesel-equivalent fuel derived from renewable biomass, including vegetable oil and animal fat;
Biogas (including landfill gas and sewage waste treatment gas) produced through the conversion of organic matter from renewable biomass; and
Other fuel derived from cellulosic biomass.
Basic parameters of the loan guarantees from the Biorefinery Assistance Program are:
The proposed operation must have realistic repayment ability.
Maximum Federal government participation in an eligible project is 80%; the borrower will need to provide the remaining 20% from other non-Federal sources.
There is no minimum loan amount and a maximum loan amount is $250 million.
Guarantee percentages range from 90% on loans of $0-125 million (under certain conditions) to 60% if the loan amount is $200 million up to and including $250 million.
Sapphire Energy’s “Green Crude Farm” in Columbus, N.M., is an example of the use of this program. In 2011, USDA provided Sapphire Energy a $54.5-million loan guarantee to build a refined alga oil commercial facility. In continuous operation since May 2012, the plant is producing renewable algal oil that can be further refined to replace petroleum-derived diesel and jet fuel. The company expects to produce 100 barrels of refined algal oil per day by 2015, and to be at commercial-scale production by 2018. After receiving additional equity from private investors, Sapphire was able to repay the remaining balance on its USDA-backed loan earlier this year.
Applications for biorefinery assistance are due by 30 January 2014. Since the start of the Obama Administration, the USDA Biorefinery Assistance Program has provided approximately $684 million in assistance to support biofuels projects in eight states.
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