Houston-based Solugen, established in 2016 through its Nobel prize-winning team of scientists, has set out to radically transform the chemicals industry.
And, in the process, this team may help save the planet.
“Solugen is a great example of how New Markets Tax Credits can be used to reduce the impacts of climate change and increase employment opportunities for communities of color,” said Brian Hollenback, President/CEO for Central States Development Partners, Inc. “Solugen’s efforts to create meaningful change aligns directly to our mission and we are happy to have played a part in their expansion.”
The company’s founders and team developed a proprietary process that couples biobased feedstock, enzymes and metal catalysts rather than petroleum to produce and manufacture end-use chemicals at a yield and throughput that is far superior to existing petroleum-based manufacturing processes.
The results of this process are high-performing, cost-competitive, carbon-negative specialty chemical products.
Solugen operates a 20,000-square foot carbon-negative green chemistry manufacturing facility in Houston, Texas. With access to New Markets Tax Credit financing, Solugen is expanding its facility to increase manufacturing capacity, enhance the product pipeline, and build out fermentation capacities to manufacture its own catalyst.
Solugen’s efforts to create meaningful change aligns directly to our mission and we are happy to have played a part in their expansion.
Brian Hollenback, President/CEO for Central States Development Partners, Inc.
Steve Ross, head of New Markets Tax Credits at Regions, helped Solugen increase its manufacturing capabilities and grow its employment base by working with three Community Development Entities (CDEs): Central States Development Partners, Prestamos CDFI, and AMCREF Community Capital.
“At Prestamos CDFI, our mission is fulfilled by providing flexible capital that create quality jobs,” said Teresa Miranda, vice president at Prestamos CDFI. “The positive impact of quality jobs and carbon-negative initiatives, like Solugen, captivated our interest. Empowering underrepresented communities through investments is key to building a sustainable and equitable future. We’re proud to aid growth in Houston’s market.”
Regions launched its New Markets Tax Credit (NMTC) practice in late 2021, hiring Ross to lead the group focused on investing in low-income communities. The practice closed the first phase of its NMTC investment deal with Solugen in November 2022, followed by a second in January 2023.
“We are proud to support Solugen and the greater Houston community by providing critical gap financing through our New Markets Tax Credit platform,” shared Ross. “These credits are an important tool for economic development and the creation of quality jobs and services for underserved communities.”
The federal NMTC program aims to break the cycle of disinvestment in low-income communities by attracting the private investment necessary to reinvigorate struggling local economies. CDEs are an important conduit to improving the financial lives of local communities. According to the U.S. Department of Treasury, which oversees the CDFI Fund, this program financed more than 10,800 businesses and created nearly 239 million-square feet of manufacturing, office and retail space in 2021.
We are proud to support Solugen and the greater Houston community by providing critical gap financing through our New Markets Tax Credit platform.
Steve Ross, head of New Markets Tax Credits at Regions
“The New Markets Tax Credit program enables emerging companies like Solugen to take advantage of a new and different source of capital with a lower cost than traditional lending,” said Alan Pike, vice president of Finance and Controller at Solugen. “We also like that the NMTC program benefits both the company and the surrounding neighborhood, bringing new jobs and tax base which in turn creates more economic activity.”
It’s not just about new business. It’s about ground-breaking work that positively impacts everyone on the planet.
“Solugen is making a positive impact on both a local and global scale,” said Susan Seagren, President of AMCREF Community Capital. “Their renovation of a vacant facility is helping to revitalize an area of Houston that suffers from aging infrastructure, a slowing economic growth rate, and vacant properties which have fallen into disrepair.
“Globally, Solugen’s innovative products are helping to address the third largest source of global CO2 emissions, the emissions from chemical production.”
Megan Bickel is the Houston-based Commercial Banking relationship manager at Regions working with the Solugen team.
“Solugen is a rapidly growing company essential in the quest to reduce the carbon footprint created by standard manufacturing using petroleum-based materials,” said Bickel. “Being part of a team supporting this growth, which is helping bring new job opportunities to our community, is so rewarding.”
The NMTC team works closely with Regions Commercial, Corporate and Real Estate bankers to provide both debt and equity solutions for clients nationwide. In addition, the team offers cash management solutions through its Treasury Management platform.
“Regions has already invested in low-income communities in markets throughout our primary footprint, including Texas, Louisiana, North Carolina, Florida, and Georgia,” noted Ross, whose team has a robust pipeline of projects in progress.