Jan. 17 (Bloomberg) -- Solazyme Inc., a U.S. biofuel company, lowered its borrowing costs with a 245.7 million-real ($120 million) loan from Brazil’s national development agency BNDES for a plant it’s building in the South American country.
The funding “represents a sharp reduction in the cost of capital compared to typical clean-technology financings,” Laurence Alexander, an analyst with Jefferies Group Inc. in New York, said in a research note today. It’s “a significant milestone for both Solazyme and the biochemicals industry.”
Solazyme Bunge Renewable Oils, a joint venture with Bunge Ltd., is paying about 4 percent interest for the eight-year loan, South San Francisco, California-based Solazyme said in a statement yesterday.
Alexander rates Solazyme a buy, with a 12-month price target of $23. Shares fell 9.2 percent to $6.88 at the close in New York.
Solazyme makes oils from sugar-consuming algae that are processed into fuel and specialty chemicals.
The companies broke ground in June on the commercial-scale plant, which is expected to be begin production in the fourth quarter. The facility is adjacent to Bunge’s Moema sugar-cane mill in Sao Paulo state.
The funding is part of a joint program between the development agency, formally Banco Nacional de Desenvolvimento Economico e Social, and the country’s research-financing agency FINEP to encourage investment in sugar-based energy and chemical projects.
To contact the reporter on this story: Justin Doom in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Reed Landberg at email@example.com