U.S. DOE suspends Los Angeles-based Rentech's loan guarantee application for its woody biomass power plant in Port St. Joe, Florida, as federal program lacks money to fund all projects; Rentech to assess next steps
May 11, 2011
– Rentech, Inc. (NYSE AMEX: RTK) announced that it received late yesterday a letter from the U.S. Department of Energy (DOE) containing notice that the Company’s loan guarantee application for its proposed Port St. Joe Renewable Energy Center (Port St. Joe Project) under the Section 1705 Title XVII Loan Guarantee Program has been placed on hold.
The DOE indicated in the letter that the Port St. Joe Project may be eligible for a loan guarantee under the Section 1703 program, and that the project’s loan guarantee application would continue to be evaluated should the DOE Loan Programs Office have sufficient budget resources. The letter also stated that the DOE is developing a process to allocate existing appropriations under the Section 1703 program for eligible projects that have already applied to the Section 1703 or 1705 programs. The DOE specified that its decision to place the project’s application on hold under the Section 1705 program was not a result of the quality of the project, but was due to a lack of sufficient appropriations to fund loan guarantees for all of the applications that have been accepted into due diligence.
In light of the DOE’s notification, Rentech will assess next steps for development and financing for the project, including further discussions with the U.S. government. The Company expects to present a path forward for the Port St. Joe Project in the coming weeks.
D. Hunt Ramsbottom, President and CEO of Rentech, commented, “With this unexpected news from the DOE, we will evaluate our best course of action for this project. We have a 20-year Power Purchase Agreement, an ideally situated site with numerous feedstock options, advanced permitting activities, and advanced negotiations for an EPC contract. We will also continue to pursue our other projects, including our recently announced Olympiad Project in the province of Ontario, and our reconfigured Rialto Project.”
About Rentech, Inc.
Rentech, Inc. (www.rentechinc.com), incorporated in 1981, provides clean energy solutions. The Company's Rentech-SilvaGas biomass gasification process can convert multiple biomass feedstocks into synthesis gas (syngas) for production of renewable fuels and power. Combining the gasification process with Rentech's unique application of syngas conditioning and clean-up technology and the patented Rentech Process based on Fischer-Tropsch chemistry, Rentech offers an integrated solution for production of synthetic fuels from biomass. The Rentech Process can also convert syngas from fossil resources into ultra-clean synthetic jet and diesel fuels, specialty waxes, and chemicals. Final product upgrading and acid gas removal technologies are provided under an alliance with UOP, a Honeywell company. Rentech develops projects and offers licenses for these technologies for application in synthetic fuels and power facilities worldwide. Rentech Energy Midwest Corporation, the Company's wholly-owned subsidiary, manufactures and sells nitrogen fertilizer products including ammonia, urea ammonia nitrate, urea granule, and urea solution in the corn-belt region of the central United States.