Aemetis Inc., a Cupertino, California-based renewable natural gas (RNG) and renewable fuels company, has announced the closing of its second $25 million, 20-year term loan guaranteed by the U.S. Department of Agriculture (USDA).
The loan brings Aemetis Biogas project financing, arranged by Greater Commercial Lending over the past nine months, to a total of $50 million.
The Aemetis Biogas Central Dairy RNG Project is now fully funded to build biogas digesters and related assets for eight additional dairies using the $9.4 million of equity financing already provided by Aemetis and the $25 million of new debt financing guaranteed by the USDA. Magnolia Bank of Elizabethtown, Kentucky, provided the primary funding for the $25 million loan to Aemetis Biogas 2 LLC, a wholly-owned subsidiary of Aemetis Inc.
“The USDA Renewable Energy for America Program (REAP) provides long-term, 20-year financing that enables the construction of projects that improve air quality and reduce carbon pollution such as the Aemetis Biogas Central Dairy Digester Project,” says Eric McAfee, chairman and CEO of Aemetis. “We appreciate the good working relationship that has been developed with the team at Greater Commercial Lending and we are pleased to have Magnolia Bank as the new primary lender for the AB-2 phase of the project.”
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The financing was guaranteed by the USDA through the Rural Energy for America Program (REAP) and carries approximately an 8.75 percent fixed interest rate for the first five years. With two REAP loans closed and three more REAP loans in process, Aemetis Biogas is currently arranging $125 million of 20-year debt funding for the development, construction and operation of the Aemetis Central Dairy Digester project, which already has signed 37 dairies and plans to build digesters for 65 dairies within the next 60 months.
Aemetis Biogas is building passive solar anaerobic digesters at dairies to capture biomethane from animal waste. After the removal of key contaminants and gas pressurization at the dairy, a biogas pipeline connects the dairies to a central facility located at the Keyes ethanol plant where the biogas is converted into below-zero carbon intensity RNG. The RNG is tested and odorized in an interconnection unit, then injected into the Pacific Gas and Electric gas pipeline for delivery to transportation fuel customers throughout California. In addition to the delivery of RNG through third parties, Aemetis is building an onsite RNG fueling station to fuel local trucks.
According to Aemetis, about 25 percent of methane emissions in California are emitted from dairy waste lagoons. When fully built, the Aemetis biogas project plans to connect dairy digesters spanning more than 65 dairy farms, producing more than 1,650,000 million British thermal units of RNG from captured dairy methane each year.
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