BlueFire Renewables has entered into a memorandum of understanding (MoU) with China Huadian Engineering Co. to finance its integrated power plant and biorefinery in Fulton, Miss., and up to 5 additional plants in the US.
Under the agreement, Huadian will invest equity by purchasing an interest in the BlueFire Fulton Renewable Energy LLC and, optionally, debt for the Fulton project to complete financing and construction for this cellulosic ethanol facility.
Additionally, upon the initial success of the Fulton Project, the agreement intends for Huadian to invest equity and/or provide debt for the development of five additional plants in the US. The deal also contemplates the formation of a joint venture to develop similar projects in China.
"This agreement provides the foundation to finance the Fulton facility and a significant number of additional plants in the US and in China and will enable BlueFire Renewables to create much needed jobs - starting with about 700 jobs for the construction of the Fulton plant," said Arnold Klann, CEO.
China Huadian Engineering Co. is one of China's largest utilities, generating more than 75,000 MW of power in China. Its parent company, China Huadian Corporation has over $51 billion in total assets.
"Having such a strong partner, both technically and financially, backing up BlueFire, is a significant advancement in bringing BlueFire's business plan to fruition," said Klann.
Huadian Engineering Co.s collaboration with BlueFire Renewables is, in part, a result of the introduction and low carbon development program launched jointly in late 2009 between the National Center for Sustainable Development in Washington, DC and the CDM Fund (supervised by the Ministry of Finance) in Beijing, China.
"The goal of the joint program is to identify important emerging practical technologies with significant potential for broad deployment in China, bring these technologies to commercial scale in the US and apply lessons learned in meeting the energy and low carbon development needs of China, the United States and globally," said Mitchell Stanley, president of NCSD.
"Cellulosic ethanol manufactured from biomass and not from food crops is mandatory for China, and BlueFire offers a scalable efficient approach to producing numerous valuable industrial chemicals from domestic sources rather than from imported petroleum."
Once terms are finalized in a definitive agreement, BlueFire will move toward financial closing allowing the company to accelerate and complete construction of its first commercial cellulosic ethanol facility in Fulton, Mississippi, it said.
First phase of construction began in December of 2010, and was completed in June 2011 with the remaining construction dependent on final financing for the complete project.
The Fulton project utilizes green and wood wastes available in the region as feedstock for the production of approximately 19 million gal/year of cellulosic ethanol sold under long-term contract to help fulfill the demand under the Federal Renewable Fuel Standard established under the Energy Independence & Security Act.