Biosynthetic Technologies announces progress in securing USDA loan guarantee for base oil plant
Biosynthetic Technologies, LLC has received approval from the U.S. Department of Agriculture (USDA) on its Phase One application for a loan guarantee under the USDA’s Biorefinery, Renewable Chemical, and Biobased Product Manufacturing Assistance Program (the “9003 Program”), the company announced. The loan guarantee funding is worth more than USD 100 million.
By advancing Biosynthetic Technologies’ application to Phase Two, the U.S. government has reserved the funds that will be used to guarantee 80% of a bank loan that will be used to build a commercial-scale manufacturing plant that will produce 20 million gallons (67,000 metric tonnes) of Biosynthetic Base Oil per year. The plant will be co-located within a major existing chemical complex.
Biosynthetic Technologies said its co-applicant for the USDA loan guarantee is one of the three largest U.S.-based banks.
During Phase Two of the application approval process, which is already underway, Biosynthetic Technologies, the bank, and the USDA will work together to finalize loan terms acceptable to the three parties. Under the terms of the 9003 Program, a portion of the project costs must be funded by Biosynthetic Technologies’ shareholders. In conjunction with the project financing, the company plans to raise a Series D equity round.
“The fact that Biosynthetic Technologies’ project was advanced to Phase Two by the USDA in this funding round is a great vote of confidence and point of validation. We are pleased that the 9003 Program was expanded recently to include renewable chemical projects, and honored to be the only chemical project selected under this program to date,” said Allen Barbieri, CEO of Biosynthetic Technologies, based in Irvine, Calif., U.S.A.