Abengoa closes $132M DOE loan guarantee, path cleared for cellulosic ethanol project

In Washington, U.S. Energy Secretary Steven Chu announced that the Department finalized a $132.4 million loan guarantee to Abengoa Bioenergy Biomass of Kansas to support the development of a 23 million gallon cellulosic ethanol plant.

Abengoa Bioenergy estimates the project will fund approximately 300 construction jobs and 65 permanent jobs. The project will be located in Hugoton, Kansas, and will convert approximately 300,000 tons of agricultural crop residues, including corn stover (stalks and leaves), into ethanol using an enzymatic hydrolysis process.  The facility will use unconverted biomass to generate 20 megawatts of electricity to power the cellulosic ethanol plant.

Barring a last-minute closing, this project is expected to represent the sunset of the DOE’s 1705 Loan Guarantee program, which is a product of the the Recovery Act.

The losers? Everyone else in the 1705 loan guarantee queue that couldn’t quite get it done in time.

The winners? Clearly, Abengoa, which now has assembled the capital to execute its plan, and last week secured its Kansas air permit. This project is now flashing green on every light on the console.

Also, the growers, who in recent months pulled down nearly $100 million in USDA support, designed to assist with developing the infrastructure to deliver biomass to the plant, at scale.

Plus, partners like Dyadic, whose C1 platform was licensed to produce enzymes for the Abengoa process, and whose licensing revenues are set to shoot skyward with the move to scale.

Finally, the local community in Hugoton, which has supported the project and now will see the rewards of well-paid, permanent clean tech jobs, and advances itself into the forefront of the advanced biofuels movement.