June 2013

Zilkha Biomass Selma, LLC

THE PROJECT

In June 2013, AMCREF Community Capital (AMCREF) provided $11.4 million of Federal NMTC financing and $7.4 million of Alabama State NMTC financing to Zilkha Biomass Selma, LLC (Zilkha) a manufacturer of a proprietary, next generation “black” wood pellet for base load renewable energy generation. Zilkha’s patented black pellet seamlessly replaces coal in power plants without requiring expensive retrofits and is also a less expensive alternative for oil-fired power plants. Zilkha black pellets are hard, low-dust and water-resistant, offering superior energy density, reduced transportation and handling costs, and improved safety when compared to white pellets. Zilkha was founded by a strong management team with a history of successfully developing renewable energy projects.

In May 2010, Zilkha purchased an abandoned traditional wood pellet facility out of bankruptcy in a highly distressed non-metro low-income community in Selma, AL. Zilkha used the NMTC financing to renovate and revitalize the existing plant, and create valuable, high quality jobs to a county suffering from 13.8% unemployment at the time of investment (Bureau of Labor Statistics).

COMMUNITY IMPACT

  • Job Creation and Support: Created up to 175 direct FTEs, including 55 direct FTEs at the Zilkha plant, 56 direct forestry FTEs and 64 direct trucking FTEs; construction generated approximately 380 direct jobs; Zilkha average wages are well above the local living wage; and the plant provides employees with job training and benefits.
  • Environmental Benefits: Facility can generate up to 275,000 metric tons of Zilkha black pellets / year, providing a cleaner, renewable alternative to coal. By replacing coal, Zilkha pellets significantly reduce CO2, SO2, NOx and mercury emissions and water pollution while providing a baseload source of renewable energy. Pellets are created from sawdust, wood chips, pulp and other fibrous waste, all of which have limited economic value and often end up in landfills. Zilkha pellets have higher energy content and are a more efficient use of resources when compared to conventional white wood pellets. Zilkha’s process does not require additional chemicals, additives or binders.
  • Community Support and Impacts: Plant helps to revitalize and return jobs to a rural community with high unemployment and few job opportunities that was adversely impacted by the closure of the original white pellet mill. Wood is sourced from within a 65-mile radius of the plant, supporting the surrounding community. Because Zilkha black pellets are hard and low dust, they offer safety advantages vs white pellets (e.g. vastly reduced explosion risk) for both employees and communities.
  • Economic / Catalytic Effects: The failure of the previous white pellet plant was a hard hit for the region’s tax base and local economic development groups. Revitalizing the plant has been strongly supported by regional and local government leaders and will have a positive ripple effect on the surrounding economy.