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IDB President promotes development through ethanol

Miami -- IDB President Luis Alberto Moreno joined prominent public and private sector officials from the United States and Brazil at a press conference today to announce an initiative to create the Inter-American Ethanol Commission.

Moreno teamed with Florida Gov. Jeb Bush and Roberto Rodrigues, President of the Superior Council of Agribusiness of the Sao Paulo State Federation of Industries (FIESP), in announcing the initiative to create the Commission. Brazil’s Minister of Agriculture, Carlos Guedes, and Linneu Carlos da Costa Lima, its deputy minister of production and agroenergy, were also in attendance, along with senior government and private sector officials and representatives of Brazilian and U.S. agricultural and trade associations. 

Moreno, Bush and Rodrigues said the initiative will seek to foster awareness of the benefits of renewable fuels to economies throughout the Americas, and to promote the creation of a hemispheric marketplace for ethanol. It will sponsor research and policy dialogue with the goal of encouraging foreign and domestic investment in environmentally sound renewable fuels and related infrastructure.

“This initiative complements the IDB’s existing strategy of assisting countries that wish to diversify their energy sources, lower their dependence in imported fuels, and expand the use of renewable energy,” Moreno said. “We see ethanol as a particularly promising opportunity for some of our member countries, and we have been providing technical assistance to several governments that are laying the groundwork for ethanol programs.”

As an example, Moreno cited an IDB-financed study commissioned by the Mexican government to determine the feasibility of launching a domestic biofuels industry. The study, released earlier this month, found that Mexico has the potential to replace 10 percent of its domestic gasoline consumption with ethanol by planting sugar cane on marginal lands that are currently not used for food crops. In such a scenario, Mexico could generate an estimated 400,000 new jobs in rural areas and save approximately $2 billion per year that it currently spends to import gasoline and gasoline additives.

“Ethanol has the potential to attract investment, generate jobs, and jump-start development in depressed rural areas,” Moreno said. “A dynamic regional ethanol market would have the added benefit of strengthening trade and energy cooperation between the U.S., Latin America and the Caribbean.”

Moreno said that in order to better focus its activities in this sector, the IDB has launched a Sustainable Energy and Climate Change Initiative that will focus on four areas:

  • Assist member countries that wish to better exploit opportunities for renewable energy and energy efficiency.

  • Accelerate the development of new biofuel industries by helping governments with viability studies, policy development, technology adoption and special financing.

  • Rapidly expand the use of carbon finance in the region through the Kyoto Protocol’s Clean Development Mechanism, while helping governments to remove market and policy barriers that discourage new investment in renewable energy.

  • Facilitate the adoption of comprehensive mitigation and adaptation strategies in countries that are vulnerable to impact of climate change.

Moreno also said the IDB is in discussions with Brazilian government authorities regarding possible financing to expand Brazil’s ethanol production, build transport and processing infrastructure necessary to expand ethanol exports, and transfer Brazilian technology and know-how to other countries with ethanol producing potential.

The IDB has lent $17 billion to energy projects in Latin America and the Caribbean since it began operations in 1961. Most of these have been concentrated in electricity generation, but the Bank has also financed geothermal, wind, and solar energy, along with cleaner production and landfill gas projects. More than 25 years ago, the IDB helped to fund the early stages of Brazil’s pioneering biofuels program.

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