10-01-2025

Montana renewables announces closing of DOE loan facility for new facility

Calumet Inc, announced today the closing of a $1.44 billion guaranteed loan facility with the U.S. Department of Energy Loan Programs Office. The loan will fund the construction and expansion of the renewable fuels facility owned by Montana Renewables LLC, an unrestricted subsidiary of Calumet.

The expansion positions Montana Renewables as one of the largest Sustainable Aviation Fuel producers globally, enabling an increase in annual production capacity to approximately 300 million gallons of SAF and 330 million gallons of combined SAF and renewable diesel. The planned expansion includes several key components: a second renewable fuels reactor (allowing approximately half of the 300-million-gallon SAF capability to be online by 2026), debottlenecking of existing units, installation of SAF blending and logistics assets, increased renewable hydrogen production, cogeneration for renewable electricity and steam, and on-site water treatment and recycling capabilities.

"This is essentially the largest agricultural investment in Montana history and will double our purchases of seed oils and tallow from approximately 1.5 billion pounds per year today to 3 billion pounds per year post expansion. This is possible through the strong support and partnership of DOE and follows over two years of detailed due diligence," said Bruce Fleming, CEO of Montana Renewables. "Our MaxSAF expansion drives regional economic development by creating jobs, supporting the broader agricultural industry, and positioning the State of Montana as a global leader in renewable fuels in a practical and highly economic way with technology that we have developed and derisked here in the United States."

"This investment is a pivotal catalyst for Calumet," said Todd Borgmann, CEO of Calumet. "Following our conversion to a C-Corporation, we emphasized the importance of the DOE loan as the next major step in Calumet's vision, and achieving that milestone is a tremendous accomplishment. As Montana Renewables grows from a first mover and innovator in SAF to become one of the largest independent producers in the world, this business continues to competitively position itself for success, which is a critical piece of Calumet's strategy to deliver ongoing shareholder value."

Loan Guarantee Structure
The loan guarantee is structured to release a first tranche of approximately $782 million to fund eligible expenses previously incurred by MRL. Simultaneous with the expected first tranche funding, Calumet expects to make an additional $150 million equity investment with funds that it currently holds. The balance of the guaranteed loan proceeds is held in a delayed draw construction facility, and MRL expects this second tranche to be disbursed during construction beginning in 2025 through the anticipated completion of the MaxSAF project in 2028. Disbursements under the guaranteed loan facility are subject to the satisfaction of certain commercial, technical, and legal conditions precedent. During construction, retained earnings from MRL are expected to supplement DOE funds to maintain debt at 55% of capitalization during the MaxSAF™ construction sequence. The loan has a 15-year tenor and an annual interest rate at the U.S. Treasury rate plus 3/8%. Servicing of principal and interest will be deferred until MaxSAF™ is commissioned.

Regional Development
An economic impact study1 produced by the University of Montana Bureau of Business and Economic Research (BBER) measured the substantial benefit to Montana in the form of jobs, income, government revenues, economic output and population. For example, by 2028, the economic footprint of the Great Falls site is expected to support a population of 4,400 Montanans, consisting primarily of working-aged families and their children.

MRL expects the expansion to catalyze additional regional development, particularly for renewable feedstocks sourced from farms and ranches. By driving local infrastructure development in transportation, agricultural and energy related businesses similar to the Minnesota SAF Hub, MRL will create a large-scale, end-to-end SAF industry comprised of public and private partners in Montana and the Pacific Northwest.

The MRL expansion is expected to create 450 construction jobs and up to 40 operations jobs.