Integrated Grain Processors Co-operative and its wholly-owned subsidiary, IGPC Ethanol Inc., will provide $100 million in loans for the 150-million litre, community-owned ethanol plant in Aylmer, ON.
Refinery
$100 million financing package gives green light to co-op project
AYLMER, ON
A $100 million financing package has cleared the way for the construction of a community-owned ethanol plant here.
Integrated Grain Processors Co-operative and its wholly-owned subsidiary, IGPC Ethanol Inc said the loans are the green light for the 150 million litre ethanol plant. The loan package includes nearly $25 million in bridge financing and a $5.3 million Letter of Credit for the construction of a natural gas pipeline.
North America Construction of Morriston, Ontario will begin work immediately on the project.
“IGPC is developing a viable alternative to petroleum fuel in Eastern Canada, and as a leading finance house in alternative fuels we are thrilled to participate in the funding of this venture,” said Sebastien Ribatto, Managing Director of Soci Det De G Den Derale’s Agro-Industrial and Bio-Fuels Group
IGPC’s 840 farmer and community members have invested over $45 million to launch the community-owned ethanol plant, the largest start-up co-operative venture ever attempted in Canada.
Including the $11.9 million in support from the federal Ethanol Expansion Program and a $14 million capital grant from the Ontario Ethanol Growth Fund, IGPC is putting over $70 million of equity into the project.
IGPC is also eligible for operating grants under the OEGF program which are designed to offset adverse changes to the price of corn and ethanol.
The ethanol plant will be a big boost for Aylmer and the rest of Elgin County. Up to 150 construction workers and trades people are expected to be working on the site over the course of the anticipated 16 month construction period. Upon commissioning, the plant will employ some 35 skilled workers and generate many more spin-off jobs.
The plant will also utilize approximately 15 million bushels of corn creating significant additional demand for Ontario corn.
IGPC project advisor George Alkalay emphasized the groundbreaking nature of the ethanol project: “We have never before seen a start-up co-operative in Canada raise so much equity from so many farmers and community members.”
A last minute refusal by the local gas utility, NRG, to follow through on its earlier commitment to allow lenders to take security in the agreements, threatened to scuttle the project. But with support from its lenders, and a strong ruling by the Ontario Energy Board ordering NRG to execute the agreements necessary for project financing, IGPC was able to close its financing.
The Co-operative now has 30 days within which to secure a reliable supply of natural gas for its ethanol plant. IGPC Vice President Brent McBlain expressed confidence that a solution will be found to the Co-operative’s natural gas troubles.
“The Province has established a regulatory framework which provides gas utilities with exclusive franchise areas. Along with those monopoly privileges comes a very heavy responsibility to serve the public interest, as the Ontario Energy Board has made abundantly clear in its recent ruling.”
DCN NEWS SERVICES
Recent Comments
comments for this post are closed