Funding woes impede 'green' wave (Baltimore)

Yonathan Zohar spent a decade developing an indoor fish-breeding system that also captures alternative-energy source methane gas.

With a licensing agreement and documented technologies in hand, Zohar’s group, Maryland Sustainable Mariculture LLC, began soliciting funding from traditional lenders. Thinking the hard part was behind him, Zohar found a new set of challenges: banks are balking at financing requests for the new technology despite its global commercial potential.

Maryland might be fertile ground for "green energy" entrepreneurs, but financing and awareness gaps are frequent hurdles for turning laboratory discoveries into commercial products, industry experts said. Maryland Sustainable Mariculture is producing blueprints for its operation, which Zohar estimates will initially produce 100,000 pounds of fish annually.

However, finding the required funding to transform science into a money- and job-producing operation is a giant hurdle, according to David D. Wolf, business advisor to Sustainable Mariculture.

"There’s a great market here, for this premium fish, with Baltimore operating close to D.C., Philadelphia, and New York," said Wolf, a retired insurance executive. "The banks aren’t in a position to lend, given all their other restrictions. They don’t have the risk capital."

Sustainable Mariculture created a way to breed fish indoors and capture methane gas produced by tank cleaning-microbes. The Recirculating Marine Aquaculture System was developed at the former University of Maryland Biotechnology Institute.

The technology breeds fish in large tanks of artificial re-circulating seawater, made possible by microbes that clean the water and, as a bonus, produce methane. The methane can be captured and used as an energy source.

State and federal alternative-energy incentives abound but entrepreneurs like Zohar are finding it difficult to crack into the burgeoning green economy. Unfortunately, for many startups, lending institutions aren’t on board.

Wolf said alternative-energy startups are still considered by banks to be "trendy" businesses, leaving companies like Sustainable Mariculture to pursue private equity investment opportunities.

Although local entrepreneurs report increasing consumer demand and strong government support and incentives, bank lending has become a scarce commodity. Many Maryland startups are determined to forge ahead in the fledgling field even if it means being equal parts entrepreneur and educator.

Read the full story in the Baltimore Business Journal.