Dec 15, 2009
Peru Biofuels project to receive $25 million from the IDB
Combined ethanol refinery, sugar plantation and electricity plant will generate 500 permanent jobs for local communities
The Inter-American Development Bank has approved a $25 million loan to support an innovative private biofuels project currently being developed in the department of Piura, Peru.
An initiative of Maple Energy Plc, an energy company that has focused solely on Peru since 1994 and is listed on the London Stock Exchange’s Alternative Investment Market and on the Lima Stock Exchange, the project is known as Maple Etanol and requires a total investment of $245.5 million.
Maple Etanol will create approximately 1,000 jobs during the construction phase and 500 ongoing jobs in the operating phase, while increasing local demand for such services as transportation, safety and food. In its effort to use local goods and services as much as possible, Maple Etanol will receive assistance from Netherlands development agency SNV, which has extensive experience in developing inclusive businesses.
The project includes construction of a sugarcane ethanol refinery with production capacity of 35 million gallons of fuel per year. It also includes planting, farming and milling of 7,800 hectares of sugarcane—the raw material for refining ethanol—on a 14,000-hectare plantation that Maple Energy purchased from the government of Piura and private individuals. The land comprises desert and/or arid areas that Maple Etanol will convert into highly productive land, introducing innovative irrigation methods and mechanizing the planting and harvesting processes.
Mechanization, along with the use of efficient drip irrigation, will enable Maple Etanol to achieve yields of up to 153 tons of sugarcane per hectare. The global average yield for this crop is approximately 100 tons per hectare.
The project will also include the construction of a 37-megawatt electricity cogeneration plant to supply power for operations. The plant will burn sugarcane waste from the ethanol distillation process to provide 100 percent of the project´s electricity needs, and enable Maple Etanol to sell excess electricity to Peru’s interconnected power system.
In addition to the $25 million from the IDB, Maple Etanol will receive cofinancing from two other multilateral agencies and a private commercial bank. The Andean Development Corporation (CAF) will finance $65 million, and the Entrepreneurial Development Bank of the Netherlands (FMO) will finance $25 million. Local private bank Interbank will also finance $25 million.
The IDB loan will have a term of 12.5 years, with a 2.5-year grace period. The interest rate will be LIBOR plus a differential or the fixed-rate equivalent.