The Sun Also Ryzes: Ryze Renewable secures financing, heads for commercial-scale advanced biofuels in Nevada

December 22, 2017 |

Today, we’d like to share news that a new biorefinery for diesel and jet fuel has finalized $112.6 million loan, backed by a USDA loan guarantee.

This is Ryze Renewables, which will construct its biorefinery in Storey County, Nevada. The  new refinery is scheduled to open in the second quarter of 2019. Production capacity has not been confirmed, but latest reports based on permitting applications pegged the capacity at 40 million gallons per year.

Ryze will use the funds to convert distiller’s corn oil from ethanol plants into renewable diesel fuel. The plant is expected to create almost 70 jobs.

All first commercials have exciting technology and feedstock stories and unique customer sets eager for the fuels — but these days, the main story when it comes to building fuels at scale is the financing.  Albert Einstein, Steven Hawking and Richard Feynman put together would have struggled to understand the gyrations that projects have to go through these days to secure the money to build.

The Three Laws of Biorefinery Finance Dynamics:

It could represent a whole new class of fluid dynamics and physics: the twists, tumbles and turns of the financing saga.  But we know the basic Three Laws of Biorefinery Finance Dynamics:

1. No project shall qualify for financing if it is an advanced biorefinery project.

2. If a project that qualifies for financing turns out to have a bioeconomy aspect to it, change the terms until it no longer qualifies or stretch out the process until the developers go a) crazy, or b) broke.

3. If a bioeconomy project still manages to qualify for financing after a nearly-infinite round of rule-changing, refer to the First Law.

Somehow, the fact that Ryze is making advanced biofuels that significantly reduce carbon emissions, promote domestic energy security, and bring well-paying jobs to rural Nevada appears to have escaped the attention of the US government, investors, agenda-ranting NGOs, and members of the Church of Latter Day Electric Vehicles — because the financing has come together.

Surely I jest, you say. Yet, you might consider this analysis from Europe which has concluded the EU’s Renewable Energy Directive is, in fact, a trojan horse aimed at promoting the increased adoption of fossil fuels. You can read about that here. We live in strange times that are getting stranger.

The financing backstory

Back to the successful financing.

Specifically, the Jefferson Financial Federal Credit Union, based in Metairie, La., part of a consortium of credit unions that pool resources to fund projects., is the lead on the USDA loan guarantee. By distributing portions of the loans, consortium members are able to leverage each other’s balance sheets to fund projects. The loan will be serviced by the Greater Nevada Credit Union.

This is the first successful 9003 USDA biorefinery loan guarantee closed since 2011, according to project consultant Cindy Thyfault of Westar Trade Resources, who advised the developers.

We have in recent months visited the financing of the Prairie Catalytic and Fulcrum projects — but Fulcrum abandoned its 9003 loan guarantee and Prairie Catalytic worked off a smaller program called the Business & Industry loan program which serves a much wider range of rural development interests.

Meanwhile, the USDA confirms that is the largest to date in USDA Rural Development’s Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program.

The Ryze backstory

When developed for the Reno area, the project was intended to cost $105 million for 40 million gallons of production capacity, would used corn oil and other feedstocks sourced from Noble Group.

Ryze said in project-related documentation that it would “manufacture 100% renewable diesel which is converted from distiller’s corn oil, esters, fatty acids or other nonfood renewable feedstock. The company’s process utilizes a unique patented technology that introduces hydrogen within a hydrotreating reactor more efficiently than competing technologies. This allows the company to use feedstocks that have a better Carbon intensity value than the ones used by other processes.”

We detailed the project and a potential sister development for the Las Vegas market in The renewing of Nevada renewable fuels and the rise of Ryze Renewables, here. 

Anatomy of A Project

You can see the project, as envisioned by its sponsors and stakeholders, in a series of public documents available online, and which we have conveniently collected in: Anatomy of a Project: The Digest’s 2017 Multi-Slide Guide to Ryze Renewables’s proposed Nevada projects.

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