DBP leads P1.78-B club loan for bioethanol fuel project

The Development Bank of the Philippines (DBP) led four other banks in signing a P1.778-billion syndicated term loan agreement last week to finance the integrated bioethanol and cogeneration power plant of San Carlos Bioenergy Inc. (SCBI) in Makati City.

The syndicated term loan will finance the first bioethanol fuel distillery in the country. SCBI aims to develop and operate an integrated ethanol distillery and power cogeneration plant with a capacity of 125,000 liters of ethanol per day and generate approximately eight megawatts of power in the San Carlos Agro-Industrial Economic Zone located in the eastern coast of Negros Occidental. SCBI expects to produce an estimated 35 to 39 million liters of fuel grade bioethanol per year.

The project is in response to the pending approval of the Biofuel Act in Congress, which calls for the blending of bioethanol fuel with gasoline to reduce negative environmental impact caused by fossil fuels and further support to the agricultural sector.

DBP president and chief executive officer Reynaldo G. David said the SCBI project is a unique and special undertaking especially since it represents a fresh approach towards altering the country’s over-reliance on oil and oil importation for its fuel requirements.

"The project is unique in being an extensively environmental endeavor with tremendous revenue potential. Its economic benefits are concrete and far reaching, and more importantly, sustainable. This project is one certainly worthy of our support."

DBP approved the P1.778 billion funding for the SCBI project under its Environmental Development Program facility. Aside from DBP, participating lenders in this initiative are Land Bank of the Philippines, Banco de Oro Universal Bank, China Banking Corp., and Equitable PCI Bank.