Strategic Biofuels, the leader in the development of carbon-negative renewable fuel plants, today announced that the Louisiana Community Development Authority Executive Committee voted unanimously to pass a resolution granting final approval for the issuing up to $1.1 billion of its revenue bonds to fund part of the Louisiana Green Fuels (LGF) project. Using the waste to produce fuels allows the LGF project to use these tax-exempt municipal bonds. Citigroup Global Markets Inc., the investment bank and financial services company, has been engaged to serve as underwriter of the bonds and will be responsible for marketing the bonds to investors.
“During 2022, we aggressively advanced the LGF project across multiple dimensions. This latest bond cap approval significantly improves the project financing structure by providing low interest rate project debt,” said Paul Schubert, CEO of Strategic Biofuels. “We greatly appreciate the confidence in the project concretely expressed by the LCDA in its unanimous approval of this increase.”
The LCDA is a statewide revenue bridge bond issuer and is authorized to issue bonds to fund economic development, industrial and manufacturing facilities, and a variety of projects on behalf of local government entities. throughout the state of Louisiana. Although the state of Louisiana allows the bonds to be issued, they are not guaranteed by the state or the LCDA and do not involve taxpayer money. To date, Strategic Biofuels has received $450 million in total bond allocations, $200 million for 2020 and $250 million for 2021. The company expects to receive substantial additional allocations over the next two years.
“We are pleased to play a part in this significant transaction for the economic impact it will have on Caldwell Parish and the entire northeast portion of the State of Louisiana,” said Ty E. Carlos, Director executive of the LCDA.
The increase in bond cap approval complements the positive financial impact on the LGF project of the recent Inflation Reduction Act. In particular, the law increased the 45Q sequestration tax credit from $50 to $85 per metric ton of CO2 for the approximately 1.4 million tonnes of CO2 per year should be sequestered. This is in addition to project revenues from the sale of the 32 million gallons of renewable fuel, credits under the Federal Renewable Fuel Standard (RIN), credits under the California Low (LCFS) and Federal Blender Tax Credits (BTC) or Production Tax Credits (CIP). These revenue streams provide the deeply carbon negative project with an exceptionally robust economy.
“LCDA’s mission is to help municipalities, 501c3s, and privately-operated entities, such as Louisiana Green Fuels, issue bonds for the construction of economic development projects, infrastructure, and environmental facilities. This project fits perfectly with our mission,” said David Rabalais, Chairman of the LCDA Executive Committee.
The State Bond Commission gave approval for the $1.1 billion bond cap at its July 21 meeting, and in August, approval from the Louisiana Community Development Authority was the final approval needed to allow the issuance of bonds up to this ceiling. The project plans to issue the bonds in late 2023. News of this issuance comes quickly after the Strategic Biofuels team recently shared additional support from the Department of Homeland Security and FEMA through their Biofuels Grant Program. port security in the form of a $1 million grant. .
For more information on Strategic Biofuels or the Louisiana Green Fuels project, visit: www.strategicbiofuels.com.
