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Posted on  

September 19, 2002

Investors sought for Dakota Renewable Fuels

By: DAVID MAACK

Any North Dakota resident or corporation with between $10,000 and $1 million to invest can send an indication of interest to Dakota Renewable Fuels, LLC, and indicate interest in an opportunity to invest money in an ethanol plant.

For the time being, many details need to be worked out before the limited liability company is ready to send out a prospectus to interested investors, said Bobby Koepplin, Valley City, a member of the board of directors.

Dakota Renewable Fuels is in the final stages of determining whether to build an ethanol plant near Valley City, or at the site of the ProGold corn sweetener plant near Wahpeton operated by Cargill.

The Wahpeton site does have some advantages, said Mike Clemens, Wimbledon, also a member of the DRF board. In particular, they include having some infrastructure already in place, like scale, railroad spur and natural gas, as well as a ready supply of corn.

Under the proposal being considered, an agreement would be signed with Cargill for infrastructure and management sharing, and would include provisions for shared marketing and sale of the company's ethanol and dried distillers grain.

Valley City is the primary choice because of its access to rail and interstate, as well as water, natural gas and corn, said Fran Romsdahl, Jamestown, and DRF board member.

Romsdahl did not give indicate when a site decision will be made, except it will be sometime soon.

The fledgling company is facing a number of challenges to be solved, some of which are in the hands of politicians in Bismarck and Washington, D.C. A subsidy of $1 million a year for 10 years will be sought from the North Dakota Legislature when it meets next year, along with up to $2.5 million in counter cyclical subsidies. Also key to the success of the company will be passage of an energy bill with provisions to promote the use of renewable energy sources, including ethanol.

Investment in the company will be limited to North Dakota residents or corporations. The investment will be in units of $5,000, with a minimum purchase of two units required. The maximum investment allowed will be 200 units, or $1 million.

DRF is proposing construction of a 30 million gallon a year facility at a total cost of $46 million. The amount includes $37.5 million for construction costs, $4 million in startup money, a $2.3 million contingency fund and financing costs of $900,000, as well as other expenses.

A solicitation of interest form may be obtained by contacting Jocie Iszler at: (701) 239-7258; fax number (701) 239-7260; or e-mail at jiszler@state.nd.us. Iszler is the executive director of the North Dakota Corn Growers Association, and North Dakota Corn Utilization Council and a DRF board member.


 

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