DOE invites Gevo to apply for $950m project loan
The US Department of Energy (DOE) has asked Gevo to start the due diligence and term sheet negotiation stage for a $950m loan to fund its first Sustainable Aviation Fuel (SAF) facility.
“We believe that reaching this stage with the DOE is a critical milestone and illustrative of Gevo’s progress in developing Net-Zero 1. We are excited to be working with the DOE on a process that supports our mission to deliver Sustainable Aviation Fuel (SAF) to the marketplace.” stated Dr. Patrick Gruber, chief executive officer, Gevo.
Gevo is applying under the DOE’s Title 17 Clean Energy Financing Programme. The Title 17 Programme was first announced in the 2015 Energy Policy Act but has been boosted significantly in the the Infrastructure Investment and Jobs Act in 2021 and the Inflation Reduction Act in 2022. It the DOE’s Loan Project Office to support: innovative energy projects with new or significantly improved technology; innovative supply chain projects; clean energy projects that receive financial support from a state agency; and energy infrastructure.
Borrowers like Gevo can apply for 100% guaranteed direct loans from the US Treasury’s Federal Financing Bank or partial guarantees for commercial debt.
Loans from the Federal Financing Bank are priced at 0.375% above the US Treasury curve and a risk based-charge. This makes DOE loans extremely competitive compared to commercial loans.
In January Gevo said that it had passed the first phase II application and diligence process for a DOE loan.
Gevo is hoping to produce 65 million gallons of SAF each year.