The US Department of Agriculture will provide loan guarantees of up to $250 million to develop commercial-scale renewable energy and chemicals projects.
The funding for the loans, part of the department’s push to support biofuels, renewable chemicals and bio-based products, comes from the Biorefinery, Renewable Chemical and Biobased Product Manufacturing Assistance Program.
Since 2009, the USDA has provided $844 million in loan commitments to 10 businesses through the programme, according to a press release.
The latest loan guarantees will go to both greenfield and brownfield businesses, and benefit both producers and the US energy market, US agriculture secretary Tom Vilsack said.
The US is a major corn-based fuel ethanol producer, and law requires the biofuel to be added to US gasoline. Mandatory blending has driven an increase in corn ethanol production, driven by low oil prices and increased petrol consumption.
Some non-commodity crop-based biofuel projects have continued to draw financing from public and private sources.
In July, Arkansas Teachers Retirement System invested $25 million in a wood pellet manufacturing plant to supply fuel for renewable power generation in the UK. The deal was bolstered by offtake agreements. In March, Benchmark Renewable Energy announced plans to build a $95 million sweet sorghum biofuel plant in Jamaica.