KiOR, Inc., announced it’s moved a step closer to getting a loan guarantee from U.S. Department of Energy, for development of a $1 billion biofuel projects.
The project consists of four refineries to convert wood biomass into drop-in biofuel replacements for gasoline and diesel.
DOE provided a term sheet, which allows KiOR to negotiate the terms of a loan guarantee. If DOE grants the loan guarantee, it would be about four times larger than the previous DOE guarantee for biofuels, offered to a joint venture between Valero Energy Corporation (NYSE: VLO) and Darling International Inc. (NYSE: DAR) last month.
KiOR’s biorefineries are planned for a combined capacity of approximately 250 million gallons of biofuel. The first two plants are expected to be in Mississippi, with additional sites planned in Georgia and Texas.
KiOR said the Mississippi plant alone is expected ot create more than 14,000 renewable energy jobs during construction and 4,000 long-term jobs supporting operations.
“The project also expects to reduce greenhouse gas lifecycle emissions by over 70% as compared to fossil-derived gasoline and diesel fuels,” said Fred Cannon, President and CEO of KiOR.
In August 2010, KiOR announced the start of engineering and construction on its first commercial facility in Columbus, MS which is expected to produce over 11 million gallons of fuel per year. KiOR also has additional projects in various stages of development in Arkansas, Alabama and other southern states.
Khosla Ventures incubated KiOR in 2007 and is the lead investor.