26 Mar Investors raise $25 million for biodiesel plant
Evansville, Wis. – Gov. Jim Doyle may have committed $250,000 in state funding to the development of a 62,400-square-foot biodiesel plant that will be built here over the next year, but it’s Wisconsin investors that have really made it possible.
The $60 million plant, to be developed by North Prairie Productions, LLC, an alternative fuel producer, will generate 45 million gallons of fuel per year.
In addition to the state funding, the company has thus far raised more than $25 million, mostly from Wisconsin investors, in an equity drive. The $25 million threshold was the minimum amount needed to break escrow and begin construction.
Mike Robinson, president of North Prairie Productions, is delighted with the state’s support, but even more grateful to investors. While biofuels have plenty of detractors, Robinson said about 800 investors, all Wisconsin residents, have committed an average of $30,000 to the company as part of an equity drive that will close on April 5.
No single investor has more than a five percent stake. “It really is a broad-based Wisconsin ownership,” Robinson said, “and we’re proud of that.”
Doyle’s announcement came during groundbreaking ceremonies on the 15-acre plant site along County Highway M on Evansville’s east side. As he has during the awarding of previous state biofuel funding, Doyle touted biodiesel as an alternative fuel that can reduce global warming and the nation’s dependence on foreign oil.
“Our state has the ideal resources to be a national model for renewable energy – from agriculture and forestry, to manufacturing and cutting-edge innovation,” Doyle said in prepared remarks.
In the case of the biodiesel plant, one of those resources will be soybeans, which will serve as a raw material in the production of biodiesel fuel. After exploring sites in Minnesota, North Prairie Productions chose the Evansville site based on its proximity to agricultural raw materials, railway, and road infrastructure.
Rock and Dane County farmers are the top soybean producers in the state, and trucking firms and railroads also stand to benefit from the plant.
Robinson said a study has confirmed the feasibility of plans to co-locate the plant with a soybean processing facility. The facility would be developed by Landmark Services Cooperative after the biodiesel plant is completed.
Robinson said the biodiesel plant would produce mostly “low-blend” B-2 and B-5 biodiesel for fuel distributors, fuel blenders, and consumers with diesel-engine vehicles. B-5, for example, pertains to fuel made with five percent biodiesel and 95 percent conventional diesel.
“Most of it will go to the corner gas station,” he said. “Most people who buy it won’t even know they are buying it.”
According to the governor’s office, the construction project is expected to create 56 jobs and generate $2.7 million for the state’s economy. Once completed, the facility initially will create 25 jobs with a median income of $50,000, and has the potential to generate an estimated $127.5 million in annual revenue and create 103 total jobs, according to the University of Wisconsin Extension.
Half the state grant will come from the Department of Transportation to help the City of Evansville, which has created a Tax Incremental Financing District to help finance public improvements, pay for the reconstruction of a 2,600-foot section of Highway M. The other half was awarded by the Department of Commerce to help the city pay for a new water main that will serve the facility.
The Doyle Administration, which has allocated $40 million in the proposed 2007-09 state budget for the development of alternative fuels, has set a goal to generate 25 percent of the state’s electricity and 25 percent of its transportation fuel from renewable sources by 2025.
Doyle believes the raw material for alternative fuels can come from a variety of sources, even cheese whey. The state recently awarded a $40,000 grant to Packerland Whey Products, which is working to convert whey, a cheese byproduct, into ethanol.
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• Evansville site chosen for biodiesel plant