CE+P clears first hurdle to securing federal loan
BRAWLEY — The developer the 160-acre Sugar Valley Energy biofuel and power complex planned at Keystone Industrial Complex says it has cleared the first hurdle to securing a $725 million federal loan to move forward.
California Ethanol + Power Chief Financial Officer Ron Blake said Thursday the company has advanced through Part I of the U.S. Department of Energy’s Loan Programs Office Title XVII Innovative Energy Loan Guarantee Program and Renewable Energy Projects and Efficient Energy Projects Solicitation, a rigorous first stage of consideration to qualify projects eligible for the program. As a result, he said, CE+P has been invited to submit a Part II Application for a Federal Loan Guarantee.
“This important milestone demonstrates that Sugar Valley Energy meets the rigorous initial evaluation standards set by the Department of Energy for innovation in renewable energy, as an invitation to
Part II is not something the Loan Programs Office extends lightly,” Blake said in a release. “Advanced biofuels represent a critical part of our nation’s energy future, and domestically produced sugarcane ethanol will provide a quality renewable resource to meet our energy needs with much lower carbon intensity than imported sources.”
“From a state-level perspective we are in line with the goals of California’s Low Carbon Fuel Standard and renewable portfolio standards,” CE+P spokeswoman Barbara Caruso said in an email Friday. “Many projects don’t get through Part 1, so being moved to Part 2 is a very positive milestone.”
If awarded, the DOE loan would be used for construction of Sugar Valley Energy, California Ethanol + Power’s long-discussed facility, which would combine advanced ethanol biorefinery, bioelectric and biogas generation along with wastewater treatment facilities.
CE+P is currently in the process of securing equity and bond financing for Sugar Valley Energy. Although previously the company had projected a 2021 groundbreaking, Caruso said they are now expecting to get underway with construction later this year.
“Conditions in the financial markets have changed since late last year, and rising interest rates have made the DOE loan opportunity more attractive,” she explained. “Seeing these forces change in the financial markets, our team began working on the DOE program months ago financing and now this is our primary focus for the debt financing.”
She said if the DOE financing is not approved, the company will continue pursuing issuance of tax exempt and private placement bonds.
CE+P said the sugarcane ethanol to be produced at Sugar Valley Energy is expected to have a Carbon Intensity score considerably lower than today’s domestically produced corn ethanol, and the planned biorefinery will incorporate next-generation measures to reduce emissions throughout its operation.
A significant part of California Ethanol + Power’s vision for Sugar Valley Energy is to contract with local agricultural producers to establish an estimated 48,000 acres of sugarcane production in the Imperial Valley. CE+P said the sugarcane feedstock will produce more than 70 million gallons of low-carbon ethanol each year along with up to 49 megawatts of electrical power.
CE+P previously reported it has obtained all the major necessary permits and environmental certifications for the development of the Sugar Valley Energy project and has entered into a long-term purchase and marketing agreement with agribusiness leader CHS Inc. to sell the ethanol produced at the new energy campus.