Lenders must submit a complete application for each loan guarantee sought under this subpart. Components of an application are submitted in two phases. Phase I applications, which are the initial application submissions, must contain the information specified in paragraphs (a) through (j) of this section, organized pursuant to a table of contents in a chapter format. Phase 2 application components may be submitted after the Agency invites the Lender and Borrower to make the phase 2 submittal and must contain the information specified in paragraph (k) of this section.
Table 1-Feasibility Study Components
(A) Executive summary |
Introduction/Project Overview (Brief general overview of Project location, size, etc.). |
Economic feasibility determination. |
Market feasibility determination. |
Technical feasibility determination. |
Financial feasibility determination. |
Management feasibility determination. |
Recommendations for implementation. |
(B) Economic Feasibility |
Description of feedstock and confirmation that the feedstock is not used elsewhere in the production of Advanced Biofuels or Biobased Products including Renewable Chemicals. |
Feedstock: |
Feedstock source management, |
Estimates of feedstock volumes and costs, |
Collection, pre-treatment, transportation, and storage, and |
Feedstock risks. |
Documentation that woody biomass feedstock from National Forest system lands or public lands cannot be used for a higher-value product. |
Impacts on any other similar Biorefineries in the area in which the Borrower proposes to place the Project, defined as the area that will supply the feedstock to the proposed Project, if any. |
Impacts on existing manufacturing plants or other facilities that use similar feedstock if the Borrower's proposed production technology is adopted. |
Projected impact on resource conservation, public health, and the environment. |
Information regarding Project site. |
Availability of trained or trainable labor. |
Availability of infrastructure, including utilities, and rail, air and road service to the site. |
Overall economic impact of the Project, including direct jobs, indirect jobs, additional markets created for agricultural and forestry products and agricultural waste material and the potential for Rural economic development. |
Feasibility/plans of Project to work with producer associations or cooperatives and the estimated amount of annual feedstock purchased from or sold to producer associations and cooperatives. |
(C) Market Feasibility |
Information on the sales organization and management. |
Nature and extent of market and market area. |
Marketing plans for sale of projected output-principal products and Byproducts. |
Extent of competition, including other similar facilities in the market area. |
Commitments from purchasers of off-take-principal products and secondary products, degree of commitment, duration or terms of Off-Take Agreements, and financial strength of counterparties. |
Risks related to the industry, including: |
Industry status; |
Specific market risks; and |
Competitive threats and advantages. |
(D) Technical Feasibility |
Suitability of the selected site for the intended use. |
Scale of development for which the process technology has been proven (i.e., pilot, demonstration, or Semi-Work Scale Facility). Provide results from pilot, demonstration, or Semi-Work Scale Facilities that prove that the technology proposed to be used is feasible and stands a good chance of being successful. The proposed technology must meet the definition of Eligible technology. |
The degree of integration of all processes should be detailed and a summary of any integrated demonstration unit test results should be submitted. |
Specific volume produced from the technology of the process (expressed either as volume of feedstock processed [tons per unit of time] or as product [gallons per unit of time]). |
Identification and estimation of Project operation and development costs. Specify the level of accuracy of these estimates and the assumptions on which these estimates have been based. Detailed analysis of Project costs including: Project management and professional services; resource assessment; Project design and permitting; land agreements and site preparation; equipment requirements and system installation; startup and shakedown; and warranties, insurance, financing and operation and maintenance costs. |
A projected timeline detailing Borrower plans from the time of loan application through plant construction, commissioning and ramp up should be included. |
Ability of the proposed system to be commercially replicated. |
Risks related to: |
Construction of the Biorefinery; |
Production of the Advanced Biofuel and Biobased Product including Renewable Chemical; |
Regulation and governmental action; |
Design-related factors that may affect Project success; and |
Technology scale up risk. |
(E) Financial Feasibility |
Reliability of the financial projections and the assumptions on which the financial statements are based, including all sources and uses of Project capital, private or public Federal and non-Federal funds. Provide detailed analysis and description of projected balance sheets, income and expense statements, and cash flow statements over the useful life of the Project. |
A detailed description of and the degree financial feasibility is dependent on: |
Investment incentives; |
Productivity incentives; |
Loans and grants; and |
Other Project authorities RINs value, tax credits, other credits, and subsidies that affect the Project. |
Any constraints or limitations in the financial projections. |
Ability of the business to achieve the projected income and cash flow. |
Assessment of the cost accounting system. |
Availability of short-term credit or other means to meet seasonal business costs. |
Adequacy of raw materials and supplies. |
Sensitivity analysis, including feedstock and energy costs and product and Byproduct prices. |
Risks related to: |
The Project; |
Borrower financing plan; |
The operational units; and |
Tax issues. |
(F) Management Feasibility |
Borrower and/or management's previous experience concerning: |
Production of Advanced Biofuel, and Biobased Product including Renewable Chemicals, as applicable; |
Acquisition of feedstock; |
Marketing and sale of off-take; and |
The receipt of Federal financial assistance, including amount of funding, date received, purpose, and outcome. |
Management plan for procurement of feedstock and labor, marketing of the off-take, and management succession. |
Risks related to: |
Borrower as a company (e.g., development-stage); |
Conflicts of Interest; and |
Management strengths and weaknesses. |
(G) Qualifications |
A resume or statement of qualifications of the author and contributors of the Feasibility Study, including prior experience, must be submitted. |
7 C.F.R. §4279.261