Sept. 24 (Bloomberg) -- Algae.Tec Ltd., a producer of algal oils used in clean fuel, plans to raise as much as $600 million and win fuel supply deals allowing it to build as many as six factories by 2015 in Brazil, Sri Lanka, Australia and the U.S.
“We will be using different project finance structures for all of these projects and they’ll all be roughly $100 million,” Chairman Roger Stroud said by phone from Sao Paulo.
Airlines in July 2011 won approval from the U.S. technical standards body to fly passenger planes using compounds made from inedible plants and organic waste mixed with petroleum-derived fuel. The ruling allows for blends of up to 50 percent biofuel. Deutsche Lufthansa AG in July 2011 became the world’s first carrier to offer routine scheduled flights running on biofuel.
Algae.Tec on Sept. 19 said it was working with Lufthansa, Europe’s second-biggest airline, to build a factory in the south of the region. The company said it was seeking a site for the facility and expected to begin producing fuel in early 2015.
The airline will contribute to funding for the project and buy at least half of the fuel produced at an agreed price. Algae.Tec has declined to disclose the expected cost of the development, saying it’s subject to a feasibility study.
Algae.Tec also began talks with Brazilian partners as it seeks to build one or two factories in the country, Stroud said. “There’s no shortage of people who will buy the fuel; both our biodiesel and jet fuel,” he said.
The company is studying the possibility of a plant in Sri Lanka as part of its joint venture with a unit of Holcim Ltd.
“We know that they’re keen to build a fully fledged facility in Sri Lanka, and that will likely be for biodiesel because of the demand for diesel in the country,” Stroud said.
The company is also “well advanced” with feasibility studies for sites in the southwestern U.S. and Australia.
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