Bank mulls $40m loan to Brazil ethanol project

23 January 2008 16:59  [Source: ICIS news]

NEW DELHI (ICIS news)--International Finance Corporation (IFC) will consider lending $40m to Brazil’s USJ Acucar e Alcool SA for part funding of its $355m sugar-to-ethanol power expansion project, the Washington-based institution said on Wednesday.

 

IFC, the World Bank’s private finance arm, said its board of directors was scheduled to consider the loan application for approval on 22 February.

 

The expansion would “contribute climate change benefits through the substitution effects from displacing fossil fuels with ethanol”, the IFC said.  

 

The project was expected to almost double cane crushing capacity for sugar and ethanol production to 10m tonnes/year from the current 5.5m tonnes/year and boost electricity co-generation capacity to 86 megawatts from 28 megawatts, USJ said.

 

The project is slated for completion in 2009.

 

The project envisaged the expansion of USJ's sugar and ethanol mills at Quirinopolis in Brazil’s Goias state and would also provide for the setting up of further facilities. 

 

IFC would assist USJ in the implementation of a clean development mechanism (CDM) as part of the project, which would aid the company in the sale of resulting carbon credits.

 

Founded in 1941, USJ is a privately held company and is still controlled by members of its founding Ometto family.

 

By: Naresh Minocha
+65 6780 4359

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