NDC completes investments in San Carlos Bio-energy

The National Development Co. (NDC), an attached agency of the Department of Trade and Industry (DTI), has completed its equity investments in the San Carlos Bio-energy Inc. (SCBI).

Trade Secretary and NDC chairman Peter B. Favila said yesterday that the NDC has released the last tranche of equity investments to SCBI amounting to P171.75 million.

Total NDC investment in SCBI is now at P211.14 million, representing a 25-percent share in the company.

NDC’s investment would serve as a catalyst for private investors to invest in similar undertakings which would reduce the country’s dependence on conventional fuel.

The SCBI has already secured a syndicated loan amounting to P1.778 billion with the Development Bank of the Philippines (DBP) as the lead arranger.

The loan completes the funding requirements of SCBI for the construction and implementation of the project.

NDC officer-in-charge Ma. Lourdes F. Rebueno said that the construction of the plant would start this month. SCBI would supply fuel ethanol to the transport sector, electricity to the distribution grid, carbon dioxide (CO2) to the beverage industry and generate Carbon Emission Reduction Certificates which can be used under the Kyoto Protocol Treaty.

With the recent signing of the Bio-fuel Law by President Arroyo,  gasoline would gradually be displaced by at least five percent blend  ethanol from 2007 to 2010, increasing to a 10 percent blend from 2010 to 2017.

A total of 3.7 billion liters of gasoline would be displaced by an equal volume of ethanol over a 10-year period.

The use of ethanol would result in a  total savings in foreign exchange of $825 million over 10 years or $82.5 million per year.

SCBI is a joint venture between the NDC, which owns 40 percent, and Bronzeoak Philippines, Inc. (BP) which owns 60 percent.

SCBI’s production capacity is 27.3 million liters per year.

Aside from the production of bioethanol, SCBI will also put up a co-generation plant using the waste bagasse to produce eight megawatts of power.

It is expected to provide employment for 183 workers.

According to BOI managing head Elmer C. Hernandez, the project was approved on a pioneer status based on the magnitude of the investment and because it is engaged in the production of a renewable source of energy.

The project, Hernandez said, was also endorsed by the Department of Energy.

The project’s benefit, Hernandez cited, include reduced emissions, improved air quality, energy security and carbon credits under the Kyoto Protocol.

SCBI’s bioethanol production would be purchased by Petron for blending into ethanol-gasoline.

SCBI will source its raw sugar cane requirement from sugar cane farmers and plantation and will not engage directly in sugar plantation.