RALEIGH, N.C. (AP) — A company that wants to turn grasses grown on North Carolina hog farms into motor fuel on Wednesday got the federal backing it wanted before building an ethanol plant supporters think could mark a milestone in the state’s rural economy.

The U.S. Agriculture Department said Wednesday it has approved a loan guarantee worth $99 million for Wilmington-based Chemtex International Inc., backing a larger bank loan for the $170 million project. The company plans to build an ethanol plant near Clinton in Sampson County that will convert high-energy grass varieties into 20 million gallons of ethanol a year. Production is expected to start in 2014.