Peru sees $100m in biofuels investment in 2008

31 January 2008 23:12  [Source: ICIS news]

CARACAS (ICIS news)--Private investment is expected to pump more than $100m (€67m) this year into Peru's rapidly emerging biofuels sector, a government minister said on Thursday.

Energy Minister Juan Valdivia said on top of the several ethanol and biodiesel projects that are expected to start up this year there are other companies looking for land to cultivate sugar cane, palm oil and jatropha to produce renewable fuels.

To that end, Valdivia called on the agriculture ministry to speed up approvals for companies requesting permission to set up operations on uncultivated land, state newswire Andina reported.

By law, the nation's diesel supply will have a required blend of 2% biodiesel by the first of 2009. The amount will reach 5% by 2011.

The growing internal market for biofuel as well a free trade agreement between the US and Peru has subsequently prompted interest from both local and international private investors.

"This [the biofuel changover] opens great expectations for the internal market and on top of that, investors have the opportunity to export biofuels with the upcoming free trade agreements," said Valdivia.

Peru is also working towards establishing a free trade agreement with China.

The Romero group, a Peruvian concern, is expected to complete a biofuels plant based on palm oil next month and Bioterra, a Spanish company, is in the process of acquiring land to start up its own operations, Valdivia said.

Most notably, Maple Energy has said it would invest $157m to build an ethanol plant, export terminal and power plant in northern Peru.

Also Thursday, President Alan Garcia inaugurated Heaven Petroleum's biodiesel plant, the first in the country.

The plant represents a new chapter in the development of Peru's energy and technological resources as well confidence in the investment climate, Garcia said.

($1.00=€0.67)

Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels.

By: Jasmina Kelemen
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