Q. What does Coskata do?
A. Coskata is a clean technology company that enables the low-cost production of biofuels and green chemicals. By leveraging proprietary microorganisms and innovative bioreactor designs, Coskata expects to dramatically improve the economics of fuel and chemicals production. For example, we expect Coskata to be a very low-cost producer of ethanol, with an annual operating cost approaching $1 per gallon.
Q. Why were you attracted to this company?
A. Coskata met our strict investment criteria: a proven technology addressing large market opportunities (fuels and chemicals); superior economics; seasoned management with experience in the energy and chemicals sectors; a positive environmental impact; and is projected to yield attractive risk adjusted returns.
Q. What is cellulosic ethanol?
A. It is a high octane renewable fuel, with a superior environmental footprint compared to gasoline and corn ethanol. Earlier generations of ethanol use corn and sugar as a feedstock, and there is concern that increased demand for these agricultural products can drive up the costs of food. Cellulosic ethanol is made from stems, leaves and trunks of plants. This can be in the form of wood, energy crops, agricultural waste and municipal solid waste (such as household trash and construction debris). Humans do not use this material as food, so there is no “food versus fuel” conflict with cellulosic ethanol.
Q. How does the USDA’s intent to provide a $250 million loan guarantee help Coskata?
A. This is a project financing mechanism defined by the U. S. Department of agriculture’s 9003 Biorefinery Loan Guarantee Program. The guarantee will be the largest ever awarded for a biofuel facility and will allow Coskata to move forward with financing the construction of a 55 million gallon per year cellulose ethanol facility in Green County, Alabama.
Q. When will the project be completed?
A. The USDA’s commitment is a critical first step in the financing process. However, the commitment is conditional and there is still work to be done. The company will be working with potential investment partners throughout 2011 to get the financing closed so the facility can proceed to construction.
Q. How many jobs is this project expected to create?
A. The facility is currently the largest planed cellulosic ethanol facility in the country and is expected to bring approximately 300 construction jobs and 700 direct and indirect jobs to Boligee, Alabama.
Q. Why was the state of Alabama chosen?
A. The Crossroads of America Industrial Park, located in Greene County, Alabama, was chosen based on its proximity to an abundant supply of sustainably-produced wood. There are many pulp and paper mills and sawmills near the park, and Coskata will utilize existing supply infrastructure already located in the region. Strong support for the project by state and local officials, including the Greene County Commission and the Industrial Development Authority was also very important to Coskata in selecting the site.