Zilkha Biomass Selma LLC
Developer: Zilkha Biomass Energy LLC
CDE: AMCREF Community Capital LLC
The other winner for the 2013 Operating Business Qualified Low-Income Community Investment of the Year award is AMCREF Community Capital for providing federal and state NMTC financing to Zilkha Biomass Fuels, a manufacturer of next generation “black” wood pellets for renewable energy generation. In 2010, Zilkha begin renovating an abandoned wood pellet facility in the highly distressed rural community of Selma, Ala. The innovative and green revitalization of the existing plant created a positive economic ripple effect throughout Selma and its surrounding communities. More than 175 high-quality, permanent jobs with average wages that are more than $35,000 above the regional living wage have been created. The construction phase of the renovation also generated 380 jobs. These new opportunities signified an economic victory for Selma County, which suffered from high unemployment rates after the closure of the original white pellet mill. Each year, the new facility will generate 275,000 metric tons of Zilkha Black® pellets, which will provide a cleaner, renewable alternative to coal. Zilkha’s patented black pellet, created with sawdust, wood chips and other fibrous waste, will significantly reduce CO2 and mercury emissions, as well as water pollution. A third-party IMPLAN analysis also estimated that the new plant will have a seven-year local economic impact of $616 million and a tax impact of $25 million.
Because of Zilkha’s innovative process of providing a renewable alternative to coal, and their lack of operating history, the company faced obstacles in funding this development. Because the company wasn’t a candidate for traditional bank debt, Zilkha had to explore alternative funding options, including bond offering. AMCREF also helped Zilkha structure a transaction that used both federal and Alabama state NMTCs. This helped Zilkha offset the relatively high cost of capital from alternative funding sources.
Congratulations to AMCREF Community Capital on their achievement and for helping Zilkha Biomass Energy LLC combine green innovation and economic opportunity to create valuable, high quality jobs in a low-income community.