After Raising Private Equity, Sapphire Energy Repays Loan Guarantee
San Diego’s Sapphire Energy, a leading developer of algae-based biofuels, says today it has repaid a $54.5 million federal loan guarantee.
As a result of the loan guarantee, made in 2009 through the Department of Agriculture’s Biorefinery Assistance Program, Sapphire says it is now producing the world’s first renewable “green” crude oil at its demonstration plant in Columbus, NM. In a statement, the company also notes that it developed the facility and began operations “on time and on budget.”
Sapphire says, “The company repaid the remaining loan balance in full after receiving additional equity from private investors, making the loan no longer necessary to complete the next, planned phase of development.”
It also was a shrewd political move for the renewable energy innovator. In the fall of 2011, the sense of anxiety at Sapphire over its federal loan guarantee was almost palpable after Solyndra, the thin-film solar module manufacturer based in Fremont, CA, ceased all business activity and filed for Chapter 11 bankruptcy reorganization.
Solyndra had received a $535 million loan guarantee from the U.S. Department of Energy, with most of the financing provided by the American Recovery and Reinvestment Act. The bankruptcy came as a surprise, and critics immediately began asking pointed questions about similar subsidy packages the government had awarded to other renewable energy projects (for billions of dollars).
The Solyndra bankruptcy also provided fodder for conservative media critics like Rush Limbaugh and Charles Krauthammer, who assailed President Obama for supporting the development of algae biofuel programs, and who began questioning the validity of algae biofuel claims.