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Range Fuels Clinches $80M USDA Loan Guarantee

While all eyes are on the $54 billion for clean energy in the proposed stimulus package, federal aid from previous green bills is starting to kick in. This morning, cellulosic ethanol startup Range Fuels says it has secured a conditional commitment for a loan guarantee from the U.S. Department of Agriculture out of the 2008 Farm Bill worth $80 million to help the company finish construction of its commercial scale plant near Soperton, Ga. Essentially, a loan guarantee is a promise by the government to back a loan if the company can’t pay it, and it enables companies to finance projects with a better interest rate and at a lower cost.

With the serious lack of debt and tax credit financing for clean power projects, the federal government is one of the better sources to help with fundraising for large-scale projects these days. Range Fuels has turned to the government before, securing a $76 million federal grant from the Department of Energy. For the loan guarantee, the USDA called it the “the first ever loan guarantee to a commercial-scale cellulosic ethanol plant,” though we’re waiting to hear back from the company of the conditions of the guarantee.

Range Fuels started construction of its 100-million-gallon-per-year plant in Soperton in November 2007, but it has been moving a bit slower than it expected, pushing back the timeline of the first phase of construction.

When the markets were better back in 2007, Range Fuels was considering an IPO to raise money for the plant, which will likely cost in the range of hundreds of millions of dollars. The venture-backed company also managed to raise $100 million in early 2008 (before the markets crashed), from Passport Capital, BlueMountain, Khosla Ventures, Leaf Clean Energy Company and Pacific Capital Group (with participation by the California Employee Retirement System.)

The loan guarantees in the Farm Bill are supposed to be allocated for building the first wave of plants for non-corn based biofuels, and companies can apply for up to $250 million per project. There’s a variety of competing companies rushing to build some of the first cellulosic ethanol plants in the United States. Verenium told us that it’s slated to break ground on its first commercial facility in the second half of this year. And Coskata plans to build a 50-million- to 100 million-gallon-per-year ethanol plant, but the company told us it has also pushed its timeline back a bit. So far, Range Fuels is leading the pack, but even headstarts don’t guarantee success in this economic climate.

12 Responses to “Range Fuels Clinches $80M USDA Loan Guarantee”

  1. Mr.johnson

    rando loan firm company

    We are private loan lender who offer loans to individuals, businesses and corperate bodies at 5% interest rate, loan term determinant. Loan for developing businesses a competitive advantage. Guarantee and not collateral for loans The loan application form on behalf of field full______________________ Address_________________________ Phone Number____________________ Occupation_______________________ State____________________________ Country__________________________ Monthly income____________________ City_____________________________ Amount Need_____________________ Loan Duration_____________________ Zip: _____________________ ___ Please all replies should be Foward to the company E-mails : [email protected]

  2. OxyMaven

    I’d love to see you do an update of what exactly Range is up to. Seems like the Federal government is now into them for $156 million?? And they’ve gotten at least that much from other VC investors? I thought that when DoE gave them their first $76 million that Range would have shown that they could build their biorefinery without additional federal funds? Why do they need more federal $$. What is actually getting built for that $300 million? Not just a 20 mil gal /yr plant I hope? This seems like another example of ethanol advocates overpromising and underdelivering