Greenleaf Biofuels secures funding for new plant

Connecticut-based Greenleaf Biofuels LLC has closed on full project funding with Sovereign Bank for its 10 MMgy biodiesel plant in New Haven, Conn. The Connecticut Community Investment Corp., in conjunction with the U.S. Small Business Administration’s 504 Program, will assume nearly half of the Sovereign term loan once the plant is operational. According to the SBA, the 504 Program is a long-term financing tool that is designed to encourage economic development within a community by providing small businesses with long-term fixed rate financing to acquire major fixed assets for expansion or modernization. Information released by Greenleaf Biofuels noted Sovereign Bank and CTCIC now join the State of Connecticut Department of Economic and Community Development and Advantage Capital Partners/Ironwood Capital as financial supporters of the project.

Greenleaf Biofuels has been active in biodiesel distribution for several years, with the ultimate goal of developing a production facility. According to Mark McCall, Greenleaf Biofuels’ chief operating officer, the company began work to develop a production facility five years ago. We started by distributing biodiesel so we could learn about the project and market, added Gus Kellogg, Greenleaf Biofuels’ president and CEO. “The end game, even when I started the distribution business, was always production,” Kellogg said. “For a long time I felt that a waterfront plant in New England just makes a ton of sense.”

The site of Greenleaf Biofuels’ proposed production facility will be located in the Port of New Haven, and will have access to water, rail and road transportation. According to Kellogg, site work on the project has already begun. The facility is expected to be operational by the second quarter of 2012.

The production equipment for the plant is a Greenline Industries system that was bought at auction. “We are working with JatroDiesel…and Innovative Design Engineering Associates…to implement a comprehensive redesign that will significantly increase the processing features available to us,” said McCall. According to Kellogg, some of the upgrades include the addition of methanol recovery and distillation systems. The plant will also feature cold filtering as part of the final polishing process.

Once operational, the plant will initially utilize waste oils as feedstock, said McCall, noting that facility is multifeedstock capable. “We do have a multiyear tolling contract with a national energy company to supply 100 percent of this feedstock and purchase 100 percent of our output,” McCall said. “We will be announcing this partnership in the near future.” It is likely that a portion of the biodiesel produced at the new facility will be used to help fill demand created by the growing Bioheat market in the Northeast.

The facility will also create benefits beyond increasing the local availability of biodiesel. Kellogg noted the plant will initially create 20 full-time jobs and several temporary construction jobs. Greenleaf is already considering expanding operations in the future, which would likely lead to the hiring of 10 to 15 additional full-time workers.

McCall also notes how important the SBA 504 program has been to funding the project. “The [Connecticut]-based 504 Lender, Connecticut Community Investment Corp., not only spearheaded our process with the SBA, but also introduced us to and worked to team with Sovereign Bank,” he said. “This economic development program fit our project to a tee and CTCIC made the process seamless.”