Last week, stockholders of Soy Energy received a mailing from their Board of Directors. Many have been quite concerned whether the plant would even be built, as the construction for the plant has not yet started at the proposed site west of Cleghorn.
There are three criteria which must be met before construction does begin, stated the mailing. The first is to receive approval from stockholders to accept the proposed changes. This has been done.
The second criteria is to have a loan commitment in place. The board is currently working on a USDA Loan Guarantee, as it will reduce the exposure of local banks on the facility loan. The board is hoping to know the results of this within 30 days.
With the heavy rains and flooding that often happen in Iowa in June, Ag Star decided to delay the construction of Soy Energy for six months., as the high prices of corn were having a negative effect on ethanol plants. The ethanol plants need to remain profitable in order for them to supply corn oil for making soy diesel. With current corn prices, ethanol plants are profitable. This was the second time Ag Star delayed the loan for Soy Energy, which the board felt was unacceptable and therefore, they decided to look for a loan elsewhere.
Farmers State Bank of Marcus has stepped up, and accepted the position of lead lender for the USDA Loan Guarantee application. and other local banks are also participating in the loan. Once the loan is complete. a list of participating banks will be posted. The board believes it is getting quite close to getting the facility loan from local banks,and is hoping to get an operating loan with other lenders.
The board had hoped to receive $3.4 million from Iowa Power Fund. It failed by a margin of one vote. Several key members were absent for the vote, so on the positive side, their application is being reviewed by the Alternative Energy Production Facility project for $1 million with zero percent interest loan.
The third item is a signed and verbal commitment of around 9 million gallons of corn oil. BEST Energies, Little Sioux Corn Processors, Siouxland Ethanol and Husker Ag have all signed onto the project. Several other plants may also join in.
The board is hoping the loans will soon be complete and construction can begin on the plant this fall. It hopes to get several buildings up, so work can continue through the winter.