Financing complete on Brazil's first commercial 2G ethanol plant

By Susanne Retka Schill | May 17, 2013

Financing for Brazil’s first commercial-scale, second-generation ethanol plant has been completed by GranBio. Its subsidiary, Bioflex Agroindustrial, received a 300.3 million reais ($149 million) loan from BNDES, Brazil’s National Social and Economic Development Bank.

The financing is to be used exclusively in the construction of GranBio’s first industrial line, a company spokesman said. The total cost of the plant is 350 million reais. The Gradin family, which controls the company, is responsible for the rest of the investment.

A licensing agreement with Beta Renewables for the conversion technology for the 22 MMgy plant was announced a year ago.  Plant construction at São Miguel dos Campos, in the state of Alagoas, began in December is scheduled to be completed early in 2014. The facility will utilize excess bagasse not needed for energy cogeneration along with sugarcane crop resident that has been left in the field up to now.

GranBio is part of the GranInvestimentos Group (formerly GraalBio Investimentos). It is a 100 percent Brazilian-owned umbrella holding company, controlled by the Gradin family. GranBio (formerly GraalBio) was formed in 2011 by the Gradin family as a biotech company focused on developing proprietary technologies and strategic alliances to be scaled industrially in Brazil. In January, BNDES made a 15 percent investment in the holding company.  In April, GranBio completed the acquisition of a 25 percent equity investment in the U.S. cellulosic ethanol process developer, American Process Inc.

“The investment in API marks GranBio’s entry into the North American Cleantech market,” Alan Hiltner, vice president, said in a statement emailed to Ethanol Producer Magazine. “It is a strategic move by the company, since the pretreatment solution developed by API enables the production of low cost cellulosic sugars which also fulfill the stringent specifications required for manufacturing biochemicals. With this platform, we will be able to expand GranBio’s activities to other products, beyond cellulosic ethanol. We are excited and very optimistic about the prospects of building the first commercial-scale plant with API technology (AVAP and GreenPower+) in Brazil followed by one in the United States.”

The company has opened a U.S. office headquartered in the San Francisco area which will be led by Vonnie Estes, managing director. Estes joins Gran Bio from Codexis Inc. where she most recently was vice president of corporate development. Prior to Codexis, she was executive vice president of business development at DuPont Danisco Cellulosic Ethanol and prior to that she led DuPon’ts commercialization program for cellulosic ethanol.

Brazil’s commitment to second-generation fuels and biobased chemicals is being demonstrated in the Alagoas project. In its news release, BNDES said the project integrates the Support Program for Industrial Technological Innovation in the Sugarcane and Sucrochemistry Sectors (PAISS). It also incorporates two BNDES programs in innovation and capital goods. The bank, which acquired a 15 percent stake in GranInvest in December, will also support social investments in the area surrounding the project.

The BNDES announcement said that the PAISS program has now approved 2 billion reais for projects developing cellulosic ethanol and chemical products from sugarcane bagasse. “Second generation ethanol is an alternative that will help to make Brazilian ethanol even more sustainable,” the bank statement said. “The use of straw and bagasse will allow industrial productivity of ethanol to reach around 10,000 liters per hectare, [1,069 gallons per acre] corresponding to an increase of up to 45 percent compared to current levels.”