Taylor Biomass will receive loan guarantee
Taylor Biomass Energy LLC, a biomass gasification plant under construction in Orange County, N.Y., will receive its $100 million loan guarantee after several months of uncertainty.
The House Republican budget proposed earlier in the year would have nixed the U.S. DOE Loan Guarantee Program, eliminating a major source of financing that Taylor Biomass had been relying on to construct the 20-megawatt waste-to-energy plant. However, the program ended up surviving the budget agreement, allowing the company to continue to move forward with the project.
The loan guarantee process has been long, according to CEO Jim Taylor. Taylor Biomass applied for a loan guarantee back in 2009 during the first of seven rounds of applications, each of which have part one and part two submission requirements. “When a project has been accepted for part two and is directed to proceed with the due-diligence phase of the process is when the race begins,” Taylor said.
In August 2010, Taylor Biomass Energy was notified that the project would receive the loan guarantee pending a due diligence review. That came about six months prior to H.R. 1’s proposal to rescind $25 billion in unobligated funds from the program, and by that time, Taylor had already invested millions into the project.
“There are 50 projects that have been accepted through part two and are now racing to get their due-diligence review to proceed through underwriting, issuance of a term sheet, negotiations and then ultimately a closing,” Taylor said. All of that must occur before the program expires on Sept. 30.
With the loan guarantee back on the table, Taylor Biomass will be one of those who beat the deadline. Taylor said the project has been issued its term sheet and is now negotiating the final terms/conditions of its loan guarantee, with a potential closing date of July 1. Construction began last year in order to qualify for the 1603 program, he said, but as 1603 was extended to the end of this year, the project went on slow-speed until now. “This saved us expensive cold concrete work during January, February and March,” he said. “We’re racing to get equity investors completed and the loan guarantee completed and then we will resume construction full speed ahead.”
About 400 jobs are associated with the construction and operation of the facility, which is being built next to Taylor’s family-owned construction and demolition debris recycling business.