A $500,000 state grant from the Minnesota Investment Fund has been awarded to the city of Heron Lake to support a local business. The city will provide a low-interest loan to Heron Lake BioEnergy LLC to help finance the construction of a new ethanol plant.

Construction of the plant is expected to cost nearly $93.4 million, and it will produce 50 million gallons of ethanol per year. An estimated 35 high-paying jobs with benefits will be created. The state funds will pay for part of the costs of building a new sewer and water treatment facility that will serve the ethanol plant.

The Minnesota Investment Fund, administered by the Minnesota Department of Employment and Economic Development (DEED), promotes job growth by providing low-interest loans to businesses to pay for land, buildings, infrastructure improvement, equipment or training. Recipients of the loans must pay at least 50 percent of the project costs through equity or other lending sources. Businesses in Minnesota or businesses that intend to locate in Minnesota are eligible.