Biomass Project Financing Solutions in Today’s Difficult Capital Markets

Biomass Magazine June 2009
By Sue Wyka

Government grants and loan guarantees could be used to help fund biomass projects until the economy improves.

The biomass industry presents exciting new opportunities in renewable energy. As an emerging industry, there remains a lot of uncertainty around feedstock costs, supply and aggregation, technology and off-take contracts. Project finance is difficult in the best of times, but it is especially challenging in today’s capital markets. The bright side is the amount of money flowing from the federal government into renewable energy in the form of grants and loan guarantees. The American Recovery and Reinvestment Act, or the stimulus package, has allocated billions to renewable energy, and biomass is one of the key focus areas. By leveraging these grant, loan guarantee and tax incentive programs, as described in the table on page 55, it is possible to get a well-planned and organized biomass project funded today. These government programs will bridge the gap in funding biomass projects until the industry matures and traditional capital becomes available.

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