Fulcrum, BlueFire score additional investments

By Kris Bevill | January 26, 2011

Two cellulosic ethanol developers have secured additional funding for their first commercial-scale production facilities. One is now ready to begin construction. The other is in a holding pattern until it receives word on a federal loan guarantee.

Fulcrum BioEnergy Inc. announced Jan. 25 it had closed a $75 million Series C financing, which will provide the final equity needed to begin construction on Fulcrum’s Sierra Biofuels Plant near Reno, Nev. The $120 million plant will produce 10.5 MMgy of ethanol from municipal solid waste (MSW) and will also produce 16 megawatts of electricity when fully operational. Fluor Corp. was previously selected by Fulcrum to serve as the engineering, procurement and construction firm. Rick Barraza, vice president of administration at Fulcrum, said a groundbreaking should be held at the site in the coming weeks and the facility is scheduled to begin production in 2012.

Fulcrum is also working its way through the U.S. DOE loan guarantee process. In 2009, the company applied for a $70 million loan guarantee. Last November, it received word its application had advanced to the term-sheet-negotiation phase of the application process. Barraza said there have been no forward developments since that time, and he anticipates the process will take several more months. Regardless, the recent $75 million investment is a clear reflection of the company’s accomplishments, he said, and demonstrates confidence among its investors.

In California, BlueFire Renewables Inc. announced it has acquired a new investor for its projects. Chicago-based Lincoln Park Capital Fund LLC has agreed to provide an initial investment of $150,000 to BlueFire, which will provide the company with the capital it needs to fulfill its short-term cash needs, according to BlueFire. Lincoln Park Capital has also agreed to invest up to $9.85 million of BlueFire’s common stock over a 30-month period. BlueFire President and CEO Arnold Klann said the investment will be spent toward constructing the company’s 19 MMgy wood waste-to-ethanol plant in Fulton, Miss., which continues to be the company’s main focus. BlueFire is also developing a 3.9 MMgy facility in Lancaster, Calif., which will use segregated green waste from MSW to produce ethanol, however, and Klann said a portion of the investment will aid in efforts to complete financing for that project.

BlueFire is another cellulosic ethanol producer that has struggled to succeed in acquiring a DOE loan guarantee. The company has a pending $215 million application with the DOE, but Klann said he has not received a recent update from the agency on the progress of that application. Last August, BlueFire also filed for a $250 million USDA loan guarantee. Klann said he was disappointed his company was not included in the USDA’s recent loan guarantee approval announcement, but he remains confident his company’s application will soon be approved. Applications requesting more than $125,000 need to be credit scored by the Office of Management and Budget and BlueFire’s application is still under review, according to Klann.