Enerkem and GreenField, Partners in VANERCO, Announce up to $39.8 Million in Repayable Contribution from the Canadian Government

(PR NewsWire/Yahoo!Finance/VANERCO) Natural Resources Minister Joe Oliver today confirmed SDTC's financial contribution in VANERCO, the joint venture partnership formed by Enerkem (www.enerkem.com and GreenField www.gfsa.com) to build and operate a cellulosic ethanol facility integrated with GreenField's existing ethanol plant in Varennes, Quebec. Through SDTC's NextGen Biofuels Fund™, $734,500 will support the initial development of the facility as a repayable contribution, an amount that could go up to $39.8 million.
"Our government is investing in advanced clean energy technologies that create well-paying jobs and generate economic opportunities," said the Honourable Joe Oliver, Canada's Minister of Natural Resources. "By supporting innovative projects like VANERCO's, we are helping Canadian companies develop an idea into a marketable reality."
"This project truly puts industrial waste to work, creating jobs in the community while producing as much as 38 million litres of ethanol a year. SDTC is proud to be a partner in this pioneering project," said Vicky Sharpe, SDTC President and CEO. "Getting technologies such as this to a commercial scale will be crucial in helping Canada play a key role in the dynamic global cleantech marketplace, currently valued at $1 trillion."
The VANERCO cellulosic ethanol plant will contribute to the ongoing development of the next generation biofuels industry in Canada. In turn, the growing sector of advanced biofuels stimulates the manufacturing sector, creates jobs, generates value from waste materials and reduces oil dependence, imports and greenhouse gas emissions while positioning Canada at the forefront of the global clean technology sector.
"Clean technologies which offer a true global alternative to fossil fuels emerge when industry pioneers, governments, venture capitalists, and academics work together to ensure a successful transition to the commercial stage," said Vincent Chornet, Chairman of VANERCO. "SDTC played a pivotal role by becoming the catalyst that helped all these players join forces. We are glad to see them on board with us in this commercial project."
The non recyclable waste to be used at the VANERCO facility will come from institutional, commercial and industrial sectors, and from construction and demolition debris. Construction of the facility, which will use Enerkem's proprietary waste-to-biofuels technology, is planned to begin in 2014.
The plant could access up to $39.8M as it passes through project milestones and required governance approvals. READ MORE and MORE (Canadian Biomass Magazine) and MORE (Ethanol Producer Magazine) and MORE (Biofuels Digest)

Excerpt from Biofuels Digest: ... Now, seen from a broad societal view — the course forward seems clear. Invest in both technologies. One fails, one succceds. You never build a second of the failures, but you build 100 iterations of the successful design. Net gain? Lots of renewable fuels, and only 1 project in 102 failed – less than a 1 percent default rate. That’ acceptable, even in the risk-averse project finance market.
But look at it from the point of view of the debt holders on those first two projects. Each — at the outset, has a 50 percent chance of failure. Now, that’s unacceptable risk — completely unacceptable. So, how do you get down the road?
Well, one way is through all-equity investments. But without the debt component, the returns get spread over more deployed capital. Like one pat of butter spread on an oversized pice of bread, the returns are too thin.
That’s where governnent steps in, to assist with the debt risk — where the societal benefit is strong, either in terms of energy independence, emissions reduction, or domestic economic development. Probably, a combination of all three.
By catalyzing the sector (through helping with pilot and demonstration projects that derisjk the first-commercial bets, and taking a key role in financing first commercials, the government does more than make a project come to life. It makes a sector come to life — not by picking winners and losers, but using its financial muscle to identify the winners and losers. READ MORE