The loan guarantee grant is said to help the construction of the company’s plant in the state of Georgia. Range Fuels said that the construction of the plant is expected to start in early 2010.

The said loan guarantee grant was also the first since the 2008 Farm Bill was approved. According to Section 9003 of the Farm Bill, appropriately called Biorefinery Assistance Program, the government will provide loan guarantees to commercial-scale biorefineries. The Section also mandates the government to give grants for demonstration-scale biorefineries that manufactures fuels that were not made out of food sources (advanced biofuels).

The guarantees given to selected companies may be used to assist and support the development or construction of their own biofuel refineries. The bill limit grants to a large $250 million for every project.

According to sources, the loan guarantee were a result of the joint labor of the Rural Development Office of the US Department of Agriculture, Range Fuels and AgSouth Farm Credit.

The Range Fuels’ plant is reported to use the populat two-step thermochemical conversion process. The said procedure is designed to gasify biomass waste to be able to create syngas. The end-product would eventually be catalyzed to ethanol.

The new ethanol plant is expected to manufacture an approcimate of 20 million gallons of ethanol per annum.