Renewable Energy Group Inc. announced May 1 it has secured financing of up to $20 million from First Midwest Bank for the $24 million capacity-expansion project at the company’s Ralston, Iowa, biodiesel refinery.

The upgrade project, announced last November, is expected to increase the annual nameplate capacity of the Ralston biorefinery from 12 million to 30 million gallons. This would match the capacity at the company’s other Iowa biorefineries in Mason City and Newton.

“This investment shows our continued confidence in biodiesel for the long-term,” said Chad Stone, chief financial officer. “This confidence was bolstered by Iowa lawmakers’ long-term commitment to higher biodiesel blends and we thank them for their support.”

Iowa Senate File 2309, which was signed into law last year by Gov. Terry Branstad at REG’s Newton biorefinery, extends the existing 2-cent-per-gallon biodiesel production tax credit for seven years beginning Jan. 1, 2018. In that year, the new law also adjusts the current retail incentive for fuel containing a minimum 5 percent biodiesel blend (B5) to 3.5 cents per gallon and creates a new 5.5-cent-per-gallon incentive for blends of B11 or more. 

First Midwest Bank has also been involved in financing for REG Newton. “I am pleased First Midwest Bank has the opportunity to expand our banking relationship with an industry leader like REG,” said Drew Lawrence, senior vice president at First Midwest. “We look forward to working on a great project that will more than double biodiesel production capacity at the Ralston facility.”

REG has grown from its beginnings in Ralston 21 years ago into North America’s largest biomass-based diesel producer. The company now owns 14 active biorefineries in the U.S. and Europe with a combined annual nameplate capacity of 502 million gallons.