BNDES OKs $116M in financing for Abengoa cellulosic ethanol plant in Sao Paulo State

December 19, 2014 |

In Brazil, the National Bank for Economic and Social Development (BNDES) approved $223.38 in financing for four sugarcane projects.

The largest announced financing is for Abengoa Bioenergy SA Agribusiness, which will receive $116.8M to implement its second-generation ethanol plant. The new project will be integrated with the Usina São Luiz first-generation ethanol plant in Pirassununga, in São Paulo state.

The project will result in the fourth 2G ethanol plant in Brazil (after the first two from GranBio, and a new plant just commissioned by Raizen). The plant will have a nominal capacity of 64 million liters per year (16.93 million gallons).

With this new investment, the capacity 2G ethanol production in Brazil will reach almost 200 million liters per year, BNDES said.

BNDES’ investment background

In February, BNDES approved $618 million in loans to promote innovation in sugarcane-based ethanol in partnership with the state research-financing agency Finep. The 10-year loans will be offered at 4% interest.

In September 2013, BNDES approved a $91 million loan for Raizen to build a second-generation ethanol plant. The 40 million liter-per-year, bagasse-to-ethanol plant is set to come online in 2015. It will be located in Piracicaba, southeastern Sao Paulo

In May 2013, BNDES approved a $150 million loan in addition to its funding scheme for GranBio’s second-generation ethanol plant in São Miguel dos Campos in the northeastern state of Alagoas. The bank’s investment arm is buying a 15% equity stake in the company for about $300 million, which was announced in December. This first facility will produce 85 million liters of ethanol annually from bagasse.

BNDES’s big leap into financing cellulosic ethanol dates back to 2011, when the development agency offered $1 billion to the Brazilian Innovation Agency to fund research and development into second generation ethanol. The loans would be part of the government’s Joint Plan to Support Industrial Technological Innovation in the sugar-based Energy and Chemical Sectors where it will support companies working on turning sugarcane biomass and sugarcane ethanol for use in diverse industrial applications over the next three years.

 

More on the story.

Category: Top Stories

Thank you for visting the Digest.