Flambeau River runs into headwinds over DOE loan guarantee for advanced biofuels project

In Wisconsin, BusinessNorth is reporting on difficulties Flambeau River advanced biofuels is having securing a DOE loan guarantee.

CEO Butch Johnson and president Bob Byrne of Flambeau River said that the DOE is requiring for a loan guarantee that the project bring its equity component up to 40-50 percent, and requested a loan term of 7 to 12 years. The execs said that the DOE would require all earnings for a period of 10 years, and leave investors with returns that would drop to as low a 6.5 percent per year after taxes. The result? For investors, a “bet on a future stream of cash that doesn’t begin for 10 years.”

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