COLUMBUS, Miss. (WCBI)- They’ve dodged a bullet…at least for now. Biofuels company Kior received a $25 Million investment Tuesday from venture capitalist Vinod Khosla, helping them stay afloat.
“Mr. Khosla had agreed. As we understand it’s going to be in $5 million increments. That’s about what it takes to run the facility for a month as I understand it. So they’ve got the money they were hoping they would get,” said Joe Higgins, CEO of Golden Triangle Development Link.
The money came just in time. The alternative fuels maker had to meet short term expenses this week, including payments to the state. The Texas-based company opened its $225 million plant in Columbus 18 months ago. Last month, Kior announced it was idling the plant because it was almost out of money. The new deal could allow the company to operate until August.
“As I understand it, what they’ll be doing is working to advance the technology and continue to make the upgrades to the plant in hopes that they can finally get over that hump to where they’re being profitable at a level where they need to be. A lot of people have questions like, what if they don’t make it? What does that do to Columbus and Lowndes County? Well, we’re not hurt from a financial standpoint. But what you can’t ignore is that there’s 110 people, 110 families that would be impacted if they lost those jobs out there. If they do not succeed it will have an adverse effect on our community,” said Higgins.
Dr. Todd French is a chemical engineering associate professor at Mississippi State University. He says he’s hoping for the best.
“This is a really nice, commercial step forward for non food related biofuels. We just really want to see them be successful because if they win, then all these other technologies that are being developed that use non-fuel biomass has a chance and they can see a path forward in commercialization,” said Dr. French.
Dr. French also says results from new technologies and industries take time.
“With the future we just have to understand that these developing technologies require time and there are hurdles that have to be overcome as you start going from the lab to the pilot to a demo, to a full commercialization and these things, you know, just take time to develop,” said Dr. French.
The “What if” no one wants to talk about is what would happen if the plant were to fail? It’s built for a very specific purpose and would be hard to turn into something else. For now, no one will even speculate.
There is no date at this time for when production will begin again. As the announcement of the deal spread, Kior’s stock also rose. Industry leaders say they hope with today’s announcement and changes in management this will lead to more good news for Kior.