Inter-American Development Bank loans $260 million for $1 billion Brazilian sugarcane ethanol project

In Brazil, the Inter-American Development Bank OKd a 15-year loan of $260 million for three sugarcane ethanol plants being built by Santa Elisa Vale do Rosario in partnership with US private equity. The total project cost is $1 billion, and includes a $360 million commercial bank finance facility in addition to the IADB loan and private equity.

Brazil background

Integrated Biodiesel Industries said that it has acquired a 10 percent stake in Ireland’s South Cone Agriculture, a developer of jatropha plantations. South Cone said that it would use the funds from the investment to develop plantations in Angola, Brazil and Argentina, and will initialize harvesting later this year it its first plantations. IBI, which will have a total production capacity of 135,000 tonnes by the end of 2008 from its plants in Argentina, said that it sought to develop alternative feedstocks to soy oil.

The national government has fined 24 ethanol producing companies more than $75 million dollars for violations relating to destruction of Atlantic coast rainforest. The companies were found to be operating without permits and growing sugarcane in areas reserved for Atlantic rainforest (as opposed to Amazonian rainforest). The producers will also be forced to restore 143,000 acres of rainforest.

• Noble Group will invest $300 million in a new sugar and ethanol mill in Sao Paulo state, with a processing capacity of 8 million tonnes of sugarcane. The mill is expected to be operating in 2010.

• The Brazilian sugar growers association, Unica, said that it expects to increase exports to the US of sugarcane ethanol in the aftermath of US Midwestern floods.

• Sugar Cane Technology Center research leaders said that Brazil would enter the cellulosic ethanol industry at the commercial-scale with a first plant opened as soon as 2011.

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