The Louisiana State Bond Commission unanimously approved the sale of up to $1.5 billion of tax-exempt bonds to finance the construction of a manufacturing plant for Origin Materials Inc.

The commission gave final approval at its latest meeting for the Louisiana Public Facilities Authority to issue revenue bonds for the Origin 2 project in Geismar.

Geismar is south of Baton Rouge in the state’s “chemical corridor,” where different companies produce a variety of products.

When built, the Origin 2 plant will convert forest and wood processing residues into carbon negative materials. The company’s technology platform can turn the carbon found in sustainable wood residues into useful materials, capturing carbon in the process.

The plant would convert an estimated 1 million dry metric tons of wood residues each year into products for a wide range of markets.

The 150-acre facility is expected to create about 500 temporary construction jobs and 200 local full-time positions with between 500 and 1,000 indirect local jobs.

“Origin is a perfect example of industry poised to help lead the transformation toward environmentally smart manufacturing,” said state Treasurer John Schroder, who chairs the commission. “The decision to locate in Louisiana is testament to the talented men and women who make up our state’s workforce.”

The front end design of Origin 2 is already under way with detailed engineering set to begin in 2023, according to the firm. Origin expects the plant to cost around $1.1 billion and be operational by mid-2025.

The approval of funding for Origin 2 comes as the Origin 1 facility in Ontario, Canada, the firm’s first zero-carbon plastic manufacturing plant, is, according to the firm, to be complete by the end of March and begin operations shortly thereafter.

The bond commission’s green light for Origin 2 followed a preliminary approval on Sept. 6 by the Louisiana Public Finance Authority’s board of trustees.

The LPFA is a conduit issuer of revenue bonds authorized by the state to sell debt to finance economic development, industrial and manufacturing facilities and a variety of projects on behalf of local governments. While the commission approves their issuance, the bonds are not guaranteed by the state or the LPFA.

“We are grateful to the state of Louisiana, the bond commission, and the LPFA for their continued support of the development of Origin 2, our first world-scale manufacturing facility,” said John Bissell, Origin’s co-founder and co-CEO.

The company said it has chosen Bank of America Securities to underwrite the bonds and market them to investors.

The firm’s use of solid waste feedstock to produce carbon negative materials allows it to use tax-exempt bonds toward financing the project.

“The issuer has applied for an allocation from the state’s private-activity volume cap,” Commission Director Lela Folse said at the meeting.

The firm expects to tap $400 million from the state’s private-activity bond volume cap; the $1.5 billion of approved bonds includes the PABs.

Origin said it is continuing to work with its financial advisors on other forms of financing and federal loan programs, including through the U.S. Department of Agriculture and Department of Energy and said it will pursue other local, state, and federal incentives programs, including using some provisions in the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act.

“The availability of this funding to support the build-out of the plant will strengthen our ability to create local jobs, and to meet growing demand for our products in the United States and internationally,” Bissell said. “The bond commission’s and LPFA’s approvals are important milestones as we continue to drive towards financing Origin 2.”

Origin Materials, based in West Sacramento, California, calls itself one of the world’s leading carbon negative materials companies.

Origin went public through a special purpose acquisition company deal in 2021. Its stock, listed on the NASDAQ, was trading at $5.32 Wednesday morning, down from $10 when the SPAC deal closed.

Last year, the bond commission gave its approval to the Louisiana Community Development Authority’s request to issue up to $1.1 billion of tax-exempt revenue bonds to finance the Louisiana Green Fuels project. Strategic Biofuels LLC plans to make diesel fuel out of plant waste.

The deal is expected to be priced by Citigroup early this year for plant developer Strategic Biofuels with LCDA as the conduit issuer.