US DOE grants $134mn to Abengoa for biorefinery

Abengoa subsidiary Abengoa Bioenergy has been selected by the US Department of Energy's Loan Programs Office to receive a $133.9 million federal loan guarantee to build a commercial-scale biorefinery to produce renewable liquid fuel from plant fiber, or cellulosic biomass.

Upon successful satisfaction of the conditions precedent and approval of the loan guarantee, the DOE is expected to issue a guarantee of the loan from the Federal Financing Bank up to the amount ultimately approved by DOE, it said.

With the offer of a conditional commitment now received, Abengoa Bioenergy has announced that they intend to start construction on the site, which is located near Hugoton, in Stephens County, Kansas, in the very near future.

"Abengoa has been developing this technology for 10 years, and the project itself has been in the development stages for over 5 years," said Manuel Sanchez, CEO of Abengoa.

"In preparation for construction of the Hugoton project, the company has developed and perfected its proprietary technologies and produced cellulosic ethanol for thousands of hours from laboratory scale, to a biomass pilot plant facility in York, Nebraska, and ultimately from a demonstration scale facility in Salamanca, Spain,” he continued.

“As a result, we are very pleased to finally achieve this financing milestone, and we thank the Department of Energy's Loan Programs Office for their offer of a conditional commitment, that if realized, will allow us to construct one of the first commercial-scale biomass conversion plants in the world," Sanchez continued.

The US Department of Energy has been a supporter of Abengoa Bioenergy's efforts to develop new ethanol production technologies since 2003.

The Department's Office of Energy Efficiency and Renewable Energy's Biomass Program originally supported the construction of the Abengoa pilot plant in York, Nebraska, with a $34 million cost matching award, then entered into a cooperative agreement with Abengoa Bioenergy in 2007 to provide up to $100 million towards the construction of the commercial facility in Hugoton, as one of six second generation biofuels facilities chosen for support in the DOE's biofuels initiative.

"After we demonstrate the commercial viability of our proprietary enzymatic hydrolysis technology in Hugoton, we then plan to incorporate the technology into many of our other existing facilities by adding cellulosic production to the existing starch ethanol facilities that we currently operate," said Javier Salgado, President and CEO of Abengoa Bioenergy.

“The new cellulosic ethanol plant will pave the way for the next generation of biofuels, which will be even more energy efficient and environmentally friendly, and will help lead the US to a cleaner, more secure energy future,” he continued.

"The plant is also designed to produce approximately 23 million gallons of advanced cellulosic ethanol each year, as well as enough energy to meet the electric power needs of the plant.”

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