First Reserve Corporation, a leading energy-focused private equity firm, has made an equity investment of $300 million in Osage Bio Energy, to fund the construction of four ethanol and protein feed production facilities, primarily in the Southeast US.
Osage Bio Energy is a sister company of Osage, Inc., which was founded in 1986 and is the largest independent distributor of ethanol in the Southeast, with current throughput of approximately 100 million gallons per year.
Osage Bio Energy’s new ethanol production facilities will be uniquely placed to provide ethanol for the eastern seaboard through Osage, Inc., which currently distributes ethanol from Midwest producers.
The facilities will have a differential cost advantage over traditional Midwestern corn-based facilities by using regionally grown barley, First Reserve said in a statement.
Barley is a winter crop that will be grown for the production of ethanol and does not compete for land for food production, the company said. It is environmentally superior to corn, reduces the transportation requirements of moving Midwestern corn and enhances the yield of regionally grown summer crops. In addition the by-product of barley, a protein meal, is a superior supplement for local livestock.
"Osage Bio Energy offers First Reserve the opportunity to build on its existing knowledge and background in the alternative energy sector," said Glenn Payne, Director at First Reserve Corporation. "The competitive pricing position derived from using a barley-based plant combined with the lack of ethanol supply to the Southeast, makes Osage Bio Energy an attractive investment for us."
About First Reserve
First Reserve is a leading private equity firm in the energy industry. First Reserve has an active investment program in the renewable energy sector and has invested in a number of companies covering biofuels; waste to energy; CO2 offset origination; and solar and wind generation. With over $1.2 billion invested and committed to alternative and renewables companies, First Reserve is one of the largest investors in renewable energy and is targeting up to 15% of funds under management to this sector.
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