Dealflow | June 17, 2024

Solugen lands a $214 million federal loan guarantee to scale sustainable chemicals production

Lynnley Browning
Guest Author

Lynnley Browning

Solugen uses natural feedstocks such as corn sugar to produce chemicals commonly used in fertilizers, cleaning agents, wastewater treatment, construction and energy production. With the conditional $213.6 million loan guarantee from the US Department of Energy’s Loan Programs Office, Solugen will construct a bigger version of its original Houston bioforge facility in southwest Minnesota.

The private company says its bio-based chemicals cost up to 40% less than the petroleum-based inputs they replace, many of which are made overseas. The project “will serve as a model for how innovative technologies can revive American industries and maintain our competitive edge on a global scale,” Solugen’s Sean Hunt said in a statement announcing the news.

First of a kind

The 500,000-square-foot Bioforge Marshall facility is a partnership between privately-held Solugen and Chicago-based agribusiness giant ADM. Dextrose from ADM’s adjacent corn processing complex will be used to make low-carbon organic acids for use in personal care products and industrial processes.

DOE’s Loan Programs Office called it “a first-of-its-kind scale-up of an innovative technology” — exactly the type of hard-to-finance project the agency looks to support (for background on FOAK financing, see, “Prime Coalition launches Trellis Climate to plug gaps for first-of-a-kind climate tech projects”).

Seeing green

DOE called the commitment “the single largest US government investment in bioindustrial manufacturing,” since the Biden administration committed to advancing biotech and biomanufacturing in 2022.

The opportunity to green the multi-trillion dollar chemicals market has lured investors: Solugen has raised about $600 million to date from investors including GIC, Baillie Gifford, Temasek, deep tech investor Fifty Years and BlackRock.