NDC embarks on 2nd ethanol project

In line with the country’s aim of promoting the development of alternative fuel in view of increasing oil prices, the National Development Co. (NDC) is embarking on a second ethanol project.

The proposed joint venture among NDC, Herminio Teves and Co., and Tao Corp. involves the development and operation of an integrated ethanol plant in Negros Oriental.

Initially, the project company to be formed, Tamlang Valley Agricultural Development Corp., will undertake countryside land lease activities for fuel ethanol production.

It is expected to lease approximately 20,000 hectares of public agricultural land located in Tamlang Valley, Negros Oriental.

The proposed joint venture will be a 65 percent to 35 percent split between the private investors and the government, with NDC taking around 25 percent of the total equity.

NDC’s involvement is to provide confidence in the success of critical projects to facilitate further private investment.

The project trails and complements the pioneering San Carlos Bioenergy Inc. (SCBI), NDC’s joint venture with Bronzeoak Philippines.

SCBI will develop, construct, own and operate an integrated ethanol distillery and power co-generation complex in Negros Occidental.

The project is designed to produce 100,000 liters per day of ethanol and approximately eight MW of power in the San Carlos Agro-Industrial Economic Zone.

The ethanol projects are expected to promote sustainable development in the countryside as they will benefit three to four million people dependent on the sugarcane industry, as well as support the pollution abatement strategies in compliance with the Clean Air Act.

NDC, an attached agency of the Department of Trade and Industry, has been assisting the government’s National Fuel Ethanol Program (NFEP) by providing equity investments in its development and project operation phases.

The NFEP is an energy independence strategy in the Medium-Term Philippine Development Plan (MTPDP) that aims to promote the production and commercialization of ethanol, a fuel additive made from sugar cane.

The NDC had previously invested in another ethanol project with Bronzeoak Philippines Inc. (BP), NFEP’s main private sector proponent.

Under the agreement, NDC put up 40 percent of the initial capital structure of SCBI which was formed to develop and operate a stand alone mill and distillery complex for ethanol, among others, while BP put up the balance of 60 percent.

BP’s organization, design and structuring of the mill and distillery complex constitute the NFEP’s development phase.

The agreement also required NDC to put up 30 percent of the equity component of the project’s operation phase while 70 percent would be financed by loans.

Apart from NDC, the other equity participants are BP, 30 percent; sugar planters’ group, 20 percent; and other investors, 20 percent.

Offering a unique bio-energy concept, SCBI will supply fuel ethanol to the transport sector, electricity to the distribution grid, CO2 to the beverage industry and generate Carbon Emission Reduction.

Certificates for the Senate-ratified Kyoto Protocol Treaty.