Biofuels Resources Inc. (BRI), a company established in the Philippines to build ethanol plants, has been funded by FE Global/Asia Clean Energy Services Fund L.P. and FEGACE Asia Sub-Fund L.P. A series of four special purpose companies focused on ethanol production in the Philippines will be financed by the Funds in partnership with BronzeOak Philippines Inc.
Using sugar cane juice from local growers as a raw material, San Carlos Bioethanol Inc. is the first in this series of investments to produce and sell 125,000 liters of ethanol daily. In order to secure a stable price for approximately 50% of raw material requirements for the plant, the project utilizes contracts with multiple sugar cane suppliers.
In the project, FE Clean Energy Group Inc. and its partners have reached a pricing agreement for 50% of the sugar cane feedstock that will be used to fuel the plant, according to Richard Roberts, Director. By tying the sugar cane price to ethanol sales, the risk of diverging sugar and ethanol prices will be reduced..”
A prominent Philippine oil refinery has agreed to purchase ethanol from SCBI under a contract that guarantees a floor price in USD.
In December 2006, President Arroyo passed a law requiring all gasoline sold in the Philippines to contain at least 5% ethanol. The goal of increasing that percentage to 10% by 2010. As a result, the oil refiner became interested in contracting for ethanol. According to Roberts, the San Carlos deal is a crucial project for the Philippine Government because “SCBI will be the first to build a fuel-grade ethanol plant in the country.”
The milled sugar cane bagasse will be used for biomass cogeneration at SCBI to generate electricity for sale to the local electricity distributor.
BRI projects will prove smart investments in the future, according to the fund manager for these funds, FE Clean Energy Group. This project will be funded by the Fund with $7,935,000.
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