Fulcrum BioEnergy snags $70 million to build ethanol plant

By Holly Jessen | November 18, 2011

The 10 MMgy municipal solid waste (MSW)-to-ethanol facility now under construction near Reno, Nev., recently got a $70 million boost from Waste Management Inc. The company announced Nov. 18 that it closed an equity investment in Fulcrum BioEnergy Inc., which includes an agreement to provide a secured loan facility for up to that amount for the Sierra BioFuels plant.

Fulcrum has applied for an $85 million U.S. DOE loan guarantee but the funding could be in jeopardy as Congress considers cuts to the federal budget. "The loan facility provides us with additional value as a back-up source of debt capital in the event we are not able to finalize a federal loan guarantee that we are pursuing," said Eric N. Pryor, vice president and CFO of Fulcrum BioEnergy.  "This investment provides us the financial resources to move forward with the construction of our Sierra BioFuels plant."

Construction is expected to be complete in the second half of 2013. The plant will process 147,000 tons of waste per year and Waste Management of Nevada announced a 15-year feedstock supply agreement in January. The company will deliver post-sorted MSW to the plant, which will convert it to low carbon ethanol and other coproducts. "This investment underpins our commitment to supporting innovative technologies that extract the value in waste and converts it into clean renewable energy," said Joe Vaillancourt, managing director for Waste Management's organic growth group. "We look forward to the development of Fulcrum's commercial-scale plant.”

Waste Management and Fulcrum also entered into a master project development agreement. The two companies plan to collaborate on the joint development of other Fulcrum projects in various U.S. locations. Waste Management subsidiaries will supply MSW though long-term feedstock agreements. "We're excited to enter this strategic relationship with Waste Management that enhances our financial resources and provides access to additional feedstock.  This allows us to expand our national development program that includes projects with the total capacity to produce more than one billion gallons of fuel annually," said E. James Macias, president and CEO of Fulcrum BioEnergy. "Waste Management joins a list of strategic partners that share our vision for turning waste into clean, domestic, advanced biofuels."

Waste Management is also an investor in Enerkem Inc., a Canadian waste-to-biofuels and chemicals company. The company’s 36 MMly MSW ethanol plant is under construction in Edmonton, Alberta, and is expected to begin operations in 2012. A second 10 MMly plant, planned for Pontotoc, Miss., is under development. The targeted feedstock for that plant is sorted MSW and wood residues.