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Business

Loan Guarantees Advance Biofuels Projects

by Melody M. Bomgardner
August 29, 2011 | APPEARED IN VOLUME 89, ISSUE 35

After years-long delays in facilities construction because of technology challenges and lack of financing, some biofuels companies are getting a helping hand from the U.S. government. Abengoa Bioenergy, a subsidiary of Spanish energy firm Abengoa, is the latest to receive government backing—in the form of a $134 million loan guarantee from the Department of Energy. The company says it will begin construction “in the very near future” on a commercial-scale cellulosic ethanol facility in Hugoton, Kan. Meanwhile, a loan guarantee from USDA helped Ineos Bio obtain $75 million in private financing for a biorefinery near Vero Beach, Fla. The project, to be completed in April 2012, will use gasification and fermentation of waste materials to produce 8 million gal of biofuels and 6 MW of electricity per year. In early July, ethanol maker Poet received a $105 million loan guarantee from DOE for a 25 million-gal cellulosic ethanol plant that it plans to build adjacent to its corn ethanol facility in Emmetsburg, Iowa. Separately, biomass gasification firm Coskata, which was offered a $250 million USDA loan guarantee in January, has raised additional funding from investors. The company says it is finalizing plans for a commercial-scale cellulosic ethanol plant in the southeastern U.S.

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