The South Dakota Supreme Court last month removed the final obstacle for a $150 million ethanol plant in Sully County, but Ringneck Energy is still trying to raise the needed money.
The company is now asking the city of Onida to issue $15 million to $20 million in tax-free municipal bonds so construction can begin in the spring, the Capital Journal reported.
Ralph McGinley of Rain Street Advisors LLC of St. Paul said the bonds would be paid off only by revenue from the ethanol plant and would not obligate the city or its residents to pay the bonds off.
According to Ringneck Energy CEO Walt Wendland bonds such as this are considered a good investment for serious investors because the returns on these bonds are not taxed by the federal government and are considered lower risk compared to other stock investments.
Wendland said he's been traveling the region for the past year seeking investors to pitch in about $70 million, but that he's not there yet.
"We are still continuing to work with investors to finish raising the equity funding," Wendland said. But the municipal bond issue "is a way to finish it sooner."
In order to issue the bonds Regneck would need municipality, said Wendland.
Last month the state Supreme Court denied an appeal by about a dozen Onida residents who oppose the plant's location just south of the city of 700. Opponents say it'll pose environmental and health hazards to them and the city.