Located at the Port of Alexandria, construction of the facility will commence in early 2016 and is expected to generate renewable fuels by converting wood chips into high octane gasoline and aromatic blendstocks.
The facility will also produce a co-product, known as CoolTerra, to enable agricultural producers to retain water and nutrients in soil in order to increase crop yields.
Cool Planet will contribute $50m in the plant, which also has investors including Google Ventures, BP, Conoco Philips, GE, Exelon and NRG Energy.
USDA Secretary Tom Vilsack said: "This partnership is the latest example of the Obama Administration’s continuing support for innovative, home-grown energy sources.
"USDA’s support for renewable energy projects like this helps create jobs in rural areas, promotes U.S. energy independence, and leads to further expansion of the growing and increasingly significant bioeconomy."
USDA has recently issued a conditional commitment on a $105m loan guarantee to Fulcrum Sierra Biofuels to construct a biorefinery in Nevada to generate renewable jet fuel from municipal solid waste.
