SGB signs mandate letter with IDB to finance Guatemalan project
Energy crop company SGB Inc. (SG Biofuels) has signed a mandate letter with the Inter-American Development Bank (IDB) for the debt financing of its 25,000-acre jatropha bioenergy project in Guatemala. The project cost is estimated at approximately $76 million.
The mandate letter enables the bank and SGB to proceed with financial, technical and environmental due diligence on a project that aims to produce 6.2 million gallons of plant oil and 640,000 metric tons of biomass per year while stimulating rural economic and social development, including the creation of more than 1,000 new jobs, improved infrastructure and health and education programs.
IDB will consider participating in the financing subject to its satisfactory analysis of the project. It is anticipated that the financing package would consist of an A loan of up to $30.6 million, to be funded by IDB and complementary financing through a B loan or a co-loan in a yet to be defined amount.
“The IDB’s decision to accept the mandate letter is a significant milestone and confirms that the project’s vision and benefits are aligned with the bank’s funding priorities,” said Kirk Haney, president and CEO of SGB. “We look forward to working with the IDB to assure that the project meets the bank’s rigorous financial, technical and environmental standards.”
The project utilizes SGB’s improved jatropha hybrids—an energy crop that is native to the Guatemala region—grown on subprime land that is not desirable for food production. Plant oil and biomass produced by jatropha have been validated as high-quality sources for advanced biofuels, power generation and specialty chemicals.
SGB is an active member of the Roundtable on Sustainable Biomaterials and is working with the RSB to ensure that the project meets the RSB’s high standards for sustainability certification. The RSB’s certification system is a global, multistakeholder bioenergy/biomaterials certification standard encompassing environmental, social and economic principles and criteria through an open, transparent and multistakeholder process. SGB previously worked with the RSB to establish the sustainability certification guidelines for jatropha.
“SGB clearly recognizes the importance of strong, credible sustainability standards for energy crops,” said Peter Ryus, RSB Services’ CEO. “We welcome SGB’s engagement and support for the RSB standard and its commitment to certify its operations in Guatemala and around the world.”
SGB’s hybrids have been developed following five years of breeding, drawing from a diverse germplasm library including more than 12,000 unique genotypes. The performance of SGB’s hybrids has been tested and validated through the company’s research and development operations in Guatemala, as well as a global network of 15 jatropha hybrid trial and agronomic research sites.
“The development of locally produced renewable energy is an important goal for Guatemala,” said Edwin Rodas, Guatemala’s deputy minister of mines and energy. “The ministry of energy supports the efforts of SGB and its team of partners and investors to develop a project that will directly address our objectives related to energy security, while promoting rural development through the creation of jobs in areas of the country that needs it most.”