Second-generation producers plea for improved federal loan programs

Ethanol Producer Magazine November 2009
By Kris Bevill
Report posted Oct. 30, 2009, at 9:11 a.m. CST

The CEOs of several cellulosic ethanol production facilities testified before a U.S. House Committee on Agriculture subcommittee Oct. 29 to explain the challenges facing second-generation ethanol projects and to suggest Congressional improvements. Topics addressed included the ethanol blend wall, producer tax credits, and greenhouse gas emissions analysis, but the majority of comments focused on financing and the lack of adequate federal grant programs.

Mascoma CEO Bruce Jamerson offered the Representatives a first-hand account of how difficult it can be for second-generation projects to obtain funding, even with governmental support. “Earlier this year, Mascoma and its financial advisors contacted 174 commercial lenders seeking a bank partner to apply for a USDA loan guarantee,” he stated. “Only two lenders were willing to work with us. We selected one, but in the end were unable to move forward due to structural problems with the USDA loan guarantee requirements.”

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