Brazil bank grants loan for GranBio cellulosic ethanol plant

08 May 2013 22:04  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Brazil’s development bank Banco Nacional de Desenvolvimento e Social (BNDES) said on Wednesday that it has granted a subsidiary of biofuels producer GranBio a reais (R) 303.3m ($151.7m, €115.3m) loan for a cellulosic ethanol plant in northeast Brazil.

The loan follows BNDES’s purchase in January of a 15% equity stake in GranBio for R600m.

The plant, in the municipality of Sao Miguel dos Campos, Alagoas state, will have a production capacity of 82m litres/year of ethanol, and will use sugarcane bagasse and straw as biomass feedstock, BNDES said.

GranBio also intends to produce specialty green chemicals using advanced biomass technology it acquired following the purchase of a 25% stake in US biotech firm American Process in April.

The plant will be the first of its kind in Brazil, and only the second commercial-scale cellulosic ethanol plant worldwide. The first such plant was built in Italy, according to BNDES.

BNDES, along with innovation funding group Finep, said it plans to invest R3bn in up to 35 projects to develop domestic cellulosic ethanol production and chemicals developed from sugarcane residue.

Investments to date – including the GranBio deal – total R2bn, the bank said.

BNDES said that the increase in productivity as a result of the expansion of cellulosic ethanol production in Brazil would help to reduce fuel imports.

($1 = €0.76, $1 = R2.00)

By: Simon West

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