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Range Fuels Closes on $80M Loan Guaranteed by USDA for Cellulosic Biofuels Plant

Range Fuels, Inc. has received a loan note guarantee from the US Department of Agriculture (USDA) and closed its related $80 million bond issuance. (Earlier post.) The proceeds from the $80 million bond will be used to partially finance the first two phases of construction of Range Fuels’ first commercial cellulosic biofuels plant using renewable and sustainable supplies of non-food biomass near Soperton, Georgia.

The first phase is scheduled to be mechanically complete this month, with production scheduled to commence in the second quarter of this year.

The loan guarantee is the result of efforts between the USDA Office of Rural Development, AgSouth Farm Credit, ACA and Range Fuels. AgSouth Farm Credit, ACA, a leader in agricultural and rural loans and part of the Farm Credit System, was the lead lender on the loan, and Silicon Valley Bank and Morgan Keegan & Company, Inc. helped facilitate the financing of this bond transaction. A conditional commitment to provide this loan note guarantee was first issued by the USDA on 16 January 2009. The issuance of the loan note guarantee demonstrates Range Fuels’ compliance with the Agency’s conditions and successful structuring of the supporting financing.

The loan guarantee is a part of USDA’s 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 or any fuel that is not corn-based. The Biorefinery Assistance program is intended to assist in developing new and emerging technologies that produce advanced biofuels to increase the nation’s energy independence; promote resource conservation, public health, and the environment; diversify markets for agricultural products and waste material and spur rural economic development.

Comments

sulleny

Good. Didn't expect the loan to come from Agriculture but this shows they have some commitment to alternative biofuels. Range is one of the more advanced cellulosic companies along with Coskata. They are both leaders in their field and we wish them great success.

SJC

Since this is a loan guarantee, it is a future liability and the USDA can take this on. I really would like to see MUCH more of this. Biofuels can help this country in SO many ways and thus is a good use of tax dollars.

Biodiversivist

Yeah, right:

"..Methanol from syngas? Oh, that technology has only been with us since 1923. Congratulations on reinventing the wheel and burning through taxpayer money in the process.."

http://i-r-squared.blogspot.com/2010/02/broken-promises-from-range-fuels.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+R-squared+%28R-Squared%29

Biodiversivist

sulleny

@Biodiversivist:

Robert Rapier tells the Range Fuels story as though it were a failed enterprise. Indeed, at $320M plus VC seed money - the Range Fuels startup has been one expensive roll of the dice. But a roll shared by venture capital and one Fed loan, one Fed backed loan, and a Georgia State grant of $6M. The U.S. taxpayer is on the hook for the $80M DoE loan. The other $240M has come from private placement.

And though the original claim for 100M gallons of ethanol is way off the table, even Rapier admits that the Soperton plant will begin producing 4 million gallons of methanol this year. It sure is a far cry from 100M gallons of ethanol. But hey, they're inventing an entirely new industry here. With technology that has never before been scaled.

So, while the $80M in taxpayer money may appear excessive - compare it to other taxpayer funded energy projects like for instance the pursuit of fusion projects. IEA invested $8.9B over 10 years - U.S. taxpayer paid $3 Billion of that. International ITER presently costs its investors €10Billion Euros. The U.S. portion is a little over $1B. The total viable energy produced by any fusion process: zero.

All together, Range Fuels is behind schedule and has varied its initial claims. But it will make alc*hol from cellulose this year and it will have cost little compared to $400B+ annually we spend on foreign oil.

SJC

$80 million with 160 million tax payers is 50 cents a piece...here is a buck...keep on truckin'!

Qadir Tapra

It sounds like Beacon Power has a better chance of surviving this & paying off taxpayers than Solyndra. I hope they can make it. Obama doesn't need yet another fiasco on his record.
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