Montana Renewables: Timing Update for DOE Loan Facility

Montana Renewables, LLC (MRL), a subsidiary of Calumet, Inc. (NASDAQ: CLMT), has announced a significant update regarding the timing of its DOE loan facility. The company, which specializes in producing sustainable aviation fuel (SAF), renewable diesel, and renewable naphtha, has received a conditional commitment for a loan guarantee of up to $1.44 billion from the U.S. Department of Energy's Loan Programs Office (LPO). This funding will support the expansion of MRL's renewable fuels facility in Great Falls, Montana.

The loan guarantee is structured in two tranches, with the first tranche of approximately $778 million expected to close in the fourth quarter of 2024. The balance of the loan guarantee will be disbursed through a delayed draw construction facility from the beginning of construction in 2025 through the anticipated completion of the MaxSAF™ project in 2028. This timing allows MRL to fund eligible expenses previously incurred by the company and make an additional $150 million equity investment with funds it currently holds.

The loan has a 15-year tenor and an annual interest rate at the U.S. Treasury rate plus 3/8% when issued (currently approximately 4 3/8%). Servicing of principal and interest will be deferred until MaxSAF™ is commissioned. This favorable financing structure enables MRL to expand its production capacity and contribute to the overall SAF market growth.



The expansion of MRL's facility is expected to create 450 construction jobs and up to 40 operations jobs at its peak. The project will utilize vegetable oils, fats, and greases to produce SAF, renewable diesel, and renewable naphtha. Once the facility reaches full capacity, MRL will be a leading global SAF producer, with its output alone representing 10% of the SAF Grand Challenge goal of 3 billion gallons annually by 2030.

The SAF Grand Challenge, a joint initiative of the DOE, Department of Transportation, and U.S. Department of Agriculture, aims to increase SAF production, lower costs, and encourage commercialization. Montana Renewables' expansion will help achieve this goal by increasing U.S. production of SAF to 3 billion gallons per year by 2030 and 35 billion gallons per year by 2050. As the aviation sector aims to meet its decarbonization goals, SAF will become increasingly vital, as it is the only viable near-term option to decarbonize the airline industry.

In conclusion, the timing update for Montana Renewables' DOE loan facility is crucial for the company's expansion plans and the overall SAF market. The loan guarantee provides the necessary funding to increase production capacity and contribute to the SAF Grand Challenge goals. The expansion of MRL's facility will create jobs, support the broader agricultural industry, and position the State of Montana as a global leader in renewable fuels.