Gevo’s Lake Preston alcohol-to-jet fuel facility in Lake Preston, South Dakota will be financeable this year and reach financial close late this year or early next, executives for the Colorado-based company said on an earnings call Thursday.
The company is working on a DOE loan guarantee for the project, dubbed Net Zero 1.
“Our work on the Department of Energy loan guarantee is going well, but as anyone who has worked on one of these knows, there’s a lot of engineering and upfront risk mitigation required much more than a typical balance sheet finance project,” President and COO Chris Ryan said on the call. “Our EPC partners are busy working with us to mitigate execution risk and ensure our contracts fit the DOE’s loan guarantee requirements.”
Finalizing the DOE loan done, raising the equity, and reaching financial close is expected to be achieved by late 4Q24 or early 1Q25, CEO Patrick Gruber said on the call.
“We want to see the CO2 pipeline in South Dakota move forward to keep Lake Preston as our most attractive site for producing sustainable aviation fuel,” Ryan said. “But we’ve developed a slate of potential sites that we’ve prequalified for future Net-Zero projects.”
Offtake partners are working to ensure that the contracted demand fits with the requirements of a DOE loan guarantee to finance the construction phase, Ryan said. Lake Preston is more than twice the size of the plant’s footprint, leaving room for future bolt-on projects.
“It’s in a location where many of the surrounding farms in the region already use climate smart agricultural practices, which reduces carbon footprint of the corn feedstock we plan to use there,” Ryan said.
The location is also near the wholly-owned RNG business in Northwest Iowa.
The company has targeted several sites for Net-Zero 2, Gruber said.
“They could be brought on pretty quickly, and all of it is done with partners,” he said. “All of this financing would be done at a project finance level, not at a Gevo level.”
