Coskata gets $40M as pilot ethanol plant nears completion

Warrenville, Ill.-based ethanol developer Coskata said today it raised $40 million in a Series C round.

The round was led by The Blackstone Group, with participation from previous investors Advanced Technology Ventures, Globespan Capital Partners, GreatPoint Ventures and Khosla Ventures.

Previous investor General Motors (NYSE: GM) did not participate.

To date, Coskata has raised more than $76 million for its process to create ethanol from biorefuse (see Khosla-backed Coskata, EcoMotors come out of stealth).

Coskata plans to use the newest funding to complete its 40,000-gallon-per-year commercial demonstration plant in Madison, Penn. The ethanol produced in the $25 million project is expected to be used by General Motors (NYSE: GM) to test its flex-fuel vehicles (see Coskata to build demonstration plant in Penn.).

Coskata came out of stealth mode in January, claiming it could produce ethanol for less than $1 per gallon using almost any carbon-based feedstock. 

Coskata is reportedly drawing up plans for its first commercial-scale plant. Working with Colwich, Kan.-based ICM, the company plans to have a U.S.-based commercial scale plant producing up to 100 million gallons of ethanol in 2011 (see Coskata, ICM to build ethanol plant). The location of the facility has not yet been announced, but the company has said it expects to break ground before the end of the year.

In October, Chief Marketing Officer Wes Bolsen said the company was looking for licensng or partnership agreements to enter the Chinese market (see Coskata enters China ethanol market).