Abengoa Bioenergy has received a conditional commitment for a $133.9m federal loan guarantee from the US Department of Energy to build its bio refinery unit in Kansas, the US.
The refinery will produce renewable liquid fuel from organic sources like plant fibre, or cellulosic biomass.
Abengoa Bioenergy President and CEO Javier Salgado said the new cellulosic ethanol plant will lead to the development of the next generation of bio fuels.
"The plant is also designed to produce approximately 23 million gallons of advanced cellulosic ethanol each year, as well as enough energy to meet the electric power needs of the plant," added Salgado.
Construction of the refinery has begun and the proposed completion date has not been disclosed.