Range Fuels Inc., has received loan guarantees from the U.S. Department of Agriculture, allowing the Colorado-based company to issue $80 million in bonds to partially finance an ethanol plant near the South Georgia city of Soperton.

The company plans to begin production in Soperton during the second quarter of this year, using pine chips to make biofuel that will be mixed with diesel, Range Fuels CEO David Aldous told GlobalAtlanta in a telephone interview. In the third quarter of this year, the Soperton plant will begin making ethanol that will be blended with gasoline, Mr. Aldous said.

The $500 million Soperton plant is expected to be completed in 2013, Mr. Aldous said.

It will be among the first facilities in the United States to produce cellulosic ethanol, biofuel made from non-edible parts of plants.

"We won't impact the price of corn, the price of sugar," said Mr. Aldous.

The fuel burns cleaner than petroleum-based fuel, he said, producing only 10 percent of the carbon emissions.

The biofuel will be sold in the U.S., he added. "What we're trying to do is replace foreign oil," said Mr. Aldous.

The loan guarantee was the first made through USDA's Biorefinery Assistance Program authorized by the 2008 Farm Bill. Under the guarantee, the U.S. government would pay off 80 percent of a bondholder's investment if Range Fuels defaulted on the bonds, said Mr. Aldous. For more information on Range Fuels, click here.

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