Jan. 14 (Bloomberg) -- Banco Nacional de Desenvolvimento Economico e Social, Brazil’s development bank, approved a 488.6 million-real loan ($241 million) to Adecoagro SA for a sugar-cane mill as the agricultural company seeks to position itself for a looming fuel deficit.
The mill, planned for Ivinhema, Mato Grosso do Sul, in the country’s center-west region, will be able to process 4.1 million metric tons of cane a year and includes a 120-megawatt biomass power plant, the Rio de Janeiro-based lender said today in an e-mailed statement. It’s expected to start processing crops next year.
Brazil, the world’s second-biggest ethanol producer, is on track to suffer a domestic shortage of fuel for light passenger vehicles by 2018 if investments in new ethanol production capacity don’t increase, according to Salim Morsy, an analyst at Bloomberg New Energy Finance’s Sao Paulo office.
“The arithmetic reality of fuel supply is that ethanol investments in greenfields must take place if the country wants to avoid the embarrassment of importing tens of millions of cubic meters of gasoline,” Morsy said in a telephone interview today.
Adecoagro operates another sugar and ethanol mill, Angelica Agroenergia, in Mato Grosso do Sul with 4 million tons of cane-crushing capacity, according to the statement.
Adecoagro has operations in Argentina, Brazil and Uruguay and its biggest investor is billionaire George Soros. The U.S. is the world’s biggest ethanol producer.
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