Bioenergy Devco issued up to $60M in county bonds
GEORGETOWN — Bioenergy Devco, the upstart company focused on turning poultry waste into compost and natural gas, was approved for up to $60 million in tax-exempt solid waste bonds earlier this week.
Peter Ettinger, the chief development officer of Bioenergy Devco, previously told the Sussex County county’s industrial revenue bond committee that the bonds will be used to finance a portion of construction costs as the company looks to build an anaerobic digester system in Seaford. The bond is expected to be issued in two portions to cover two phases of construction, each timed with 100,000 tons of poultry waste that will be processed pending permit approval.
Sussex County Council voted to issue the bonds on April 27, following the recommendation of the county’s industrial revenue bond committee.
“We are thrilled about our long-term partnership here and our commitment to the Sussex County community,” Ettinger told the Delaware Business Times. “[This approval] illustrates the full faith and trust of Sussex County in our Bioenergy Innovation Center project.”
Sussex County Finance Director Gina Jennings said that the county would have no financial liability for the bonds, and no taxpayer money is loaned out. Bioenergy Devco will pay for all costs incurred during issuance of the 30-year bonds and responsible for repayment of the loan. This authorization allows Bioenergy Devco to issue private activity bonds that are tax-exempt for federal tax purposes.
Last year, Bioenergy Devco bought the former Perdue Farms AgriRecycle facility just south of Seaford and continues to compost 30,000 tons of poultry waste per year from Perdue Farms on the Delmarva Peninsula.
“People like the product, they are interested in the product and they continue to buy it and it goes off-shore,” Ettinger told the industrial revenue bond committee on March 17. “We call this an innovation center because, in essence, we want it to be a showcase of agriculture and waste management as well as production of clean, natural energy.”
The company plans to build two digester tanks to ferment poultry waste to create digestate, a soil conditioner that can eventually be composted, and natural gas, which rises to the top of the tank for removal. The digestate will be used to create compost and Chesapeake Utilities proposed to truck the natural gas away to process it and feed it into its pipeline.
The bond covers a $28 million first phase of construction, while the second phase could cost up to $38 million, according to Bioenergy Devco’s application. Each phase would cover 100,000 tons of poultry waste, and timing depends on permitting and pending contracts with other feedstock suppliers. Bioenergy Devco already has a 20-year contract with Purdue, but the company is also in discussions with Mountaire Farms.
“Phase two come in a little faster than we originally thought,” Bioenergy Devco Chief Financial Officer Chip Hoagland told the committee last month. “But our current plan is to fund it all with equity, and by doing the bond deal we will refinance for phase one in order to reinvest the money into phase two as well as other projects.”
The digester system should be in full operation by early 2022 at the latest, if it receives final approval. Bioenergy Devco also plans on partnering with University of Delaware and Delaware Technical Community College to continue the study of technology improvements for production, Ettinger added.