USDA Awards $80M Loan Guarantee to Range Fuels; First Loan Guarantee to a Commercial-Scale Cellulosic Ethanol Plant
|Overview of the Range Fuels two-step process. Source: Range Fuels. Click to enlarge.|
The US Department of Agriculture (USDA) has awarded Range Fuels, Inc. a conditional commitment for an $80 million loan guarantee to assist construction of Range Fuels’ commercial cellulosic ethanol plant near Soperton, Georgia, the first phase of which is under construction and on track to begin production in 2010.
This is the first loan guarantee to a commercial-scale cellulosic ethanol plant. The $80 million loan comes from the Section 9003 Biorefinery Assistance Program authorized by the 2008 Farm Bill, which provides loan guarantees for commercial-scale biorefineries and grants for demonstration-scale biorefineries that produce advanced biofuels—defined as fuels that are not produced from food sources.
The loan guarantees can be used to develop, construct and retrofit viable advanced biofuels biorefineries. The maximum loan guarantee under the program is $250 million per project.
The loan guarantee is the result of efforts between the US Department of Agriculture Office of Rural Development, AgSouth Farm Credit, and Range Fuels. AgSouth Farm Credit, a leader in agricultural and rural loans and part of Farm Credit Services, will be the lead lending agency on the loan.
Range’s proprietary K2 system uses a two-step thermochemical conversion process that first gasifies biomass waste such as wood chips to create a syngas, which it then converts catalytically to ethanol. (Earlier post.) When fully operational in 2010, the Soperton plant is expected to produce approximately 20 million gallons of cellulosic ethanol per year.
In April 2008, Range announced that it had raised more than $100 million through an oversubscribed Series B private financing round. (Earlier post.) In November 2007, Range signed a $76 million Technology Investment Agreement with the US Department of Energy (DOE). Under the agreement, Range Fuels will receive $50 million based upon the project construction schedule for the first 20-million-gallon-per-year phase of its Soperton Plant. The remainder of the grant, $26 million, will be provided for construction of the next phase of the project.
The company is also working with energy crop company Ceres, Inc. on testing improved switchgrass cultivars and high-biomass sorghum hybrids. (Earlier post.)