Location: Kenansville, North Carolina
Years in Business: 1 year
Product/Service: Biogas from animal waste
NCIFund Role: Business loan
Sector: Renewable Energy
Impact: Water Quality, Renewable Energy

Until recently, the 2000 Smithfield Agreement between the State of NC and Smithfield Foods, Inc., under which Smithfield agreed to finance research into alternatives to the lagoons, has struggled to find true solutions to managing this waste. One line of research has been to find technologies that can generate electricity from methane generated by anaerobic digestion of the waste; pilot projects have struggled to identify solutions that are economically viable at the farm level. 

The Opportunity
In March 2018, Optima KV (the Kenansville, NC project of OptimaBio, LLC) teamed with the engineering firm of Cavanaugh & Associates to complete years of experimentation and launch the first commercially viable strategy. The system collects biogas from multiple farms, cleans it to pipeline grade natural gas and injects it directly into the natural gas pipeline running through eastern NC. The system features five in-ground anaerobic digesters on five separate hog farms that can process a total of 430,000 cubic feet of raw biogas per day. Duke Energy then purchases the gas and generates electricity at its gas turbine generating plants.

NCIFund recognized the game-changing nature of this approach, and we committed early to the project, providing a $500,000 bridge loan for a USDA REAP (Rural Energy for American Program) grant used to purchase industrial gas cleaning equipment. Other financing for the multimillion-dollar project came from Live Oak Bank, the NC Department of Commerce, the NC Agricultural Finance Authority and the Duplin County EDA.

With Optima’s innovation, anaerobic digestion has become an economically viable technology for processing hog waste into usable energy. Optima KV has created a profitable system for disposing animal waste that reduces greenhouse gas emissions by 35,000 tons and powers 800 homes a year. Additionally, the project alleviates odors and provides some runoff protection from hurricane flooding.

Taking measured risk to assist in piloting promising “triple-bottom-line” solutions is a crucial role for NCIFund to play in our current environment, and our investment has paid off. In October, 2018, Smithfield Foods announced an initiative to make significant investments in the Optima anaerobic digestion technology designed to take the innovation “to scale.”

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View a Smithfield Foods video that features the Optima KV project.