Coskata will use the funding to complete their demonstration facility located near Pittsburg in early 2009, and to initiate engineering and design work on the company’s first full-scale commercial facility.

In addition to Blackstone, new investors include Sumitomo and Arancia. Notably, several of Coskata’s earlier Series A and Series B investors also participated meaningfully in the round, including Khosla Ventures, Advanced Technology Ventures, Globespan Capital Partners, and TriplePoint Capital. The valuation and terms of the financing round were not disclosed.

Coskata is commercializing a three-step thermo-biochemical process that will produce ethanol from a wide variety of non-food, carbon-based feedstocks, at an operating cost of approximately US $1 per gallon. The process combines the flexibility of gasification with the efficiency of biological catalytic conversion of syngas to produce fuel-grade ethanol.