Gevo, Inc., a developer of net-zero hydrocarbon fuels and chemicals, has announced that it has received a conditional commitment for a loan guarantee totalling $1.46 billion (excluding capitalised interest during construction) from the US Department of Energy’s (DOE) Loan Programs Office (LPO) for its Net-Zero 1 project (NZ1) in South Dakota.
Including capitalised interest during construction, the DOE loan facility has a total borrowing capacity of $1.63 billion.
The NZ1 facility, currently under construction in Lake Preston, South Dakota, will utilize 100% US-sourced feedstocks. It is designed to produce approximately 60 million gallons of sustainable aviation fuel (SAF), around 1.3 billion pounds of protein and animal feed products, and approximately 30 million pounds of corn oil annually.
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“This marks a watershed moment for the Net-Zero 1 project and a critical step forward in Gevo’s mission to transform the aviation industry by providing a scalable, sustainable, and economical renewable-carbon-based jet fuel—SAF,” said Gevo CEO Dr. Patrick Gruber.
He added, “This valuable commitment to help finance NZ1, if finalized, should also attract other capital investments to unlock SAF commercialization given the robust due diligence conducted by the agency. The due diligence work by the DOE has been incredibly detailed and thorough, and the benefit is a substantially reduced execution risk profile for the project. We are grateful for the support from the Department of Energy’s Loan Programs Office.”
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When combined with Gevo’s business system, the design capability of the NZ1 facility aims to yield SAF with a net-zero carbon footprint over its lifecycle, including during fuel combustion.
Gevo’s net-zero SAF projects are anticipated to drive the accelerated adoption of climate-smart agricultural practices, support rural jobs and economic development, and enhance domestic energy security.
NZ1 is the first large-scale alcohol-to-jet (ATJ) project to receive a conditional commitment from the DOE LPO, providing significant new opportunities for South Dakota workers, farmers, and residents.
Gevo believes its proprietary ATJ plant design offers the lowest cost per ton of carbon abatement among current SAF production technologies.
A recent report from Charles River Associates (CRA) forecasts significant economic and climate benefits from Gevo’s Net-Zero 1 (NZ1) facility. The project is expected to create over 1,300 indirect jobs during construction and 100 permanent positions, generating more than $100 million annual economic impact.
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The design and financing model of NZ1 may serve as a template for future Gevo projects, potentially accelerating SAF commercialization.
Gevo plans to verify its products’ sustainability and carbon intensity through its subsidiary, Verity Holdings, LLC.
This conditional commitment milestone reduces execution risk for attracting large-scale equity investors, with projected high teens returns.
However, the DOE and Gevo must meet several technical, legal, environmental, and financial conditions before finalizing financing documents and funding the loan guarantee.