Shell’s $12bn biofuel firm goes ahead

 
Marion Dakers
SHELL’S ethanol joint venture with Brazilian oil firm Cosan will have a market value of $12bn (£7.5bn), the firms confirmed yesterday.

The firms said in a statement that a new entity called Raizen, which is due to launch in the first half of this year, will produce 580m gallons of ethanol per year for the Brazilian and international markets.

The deal, which was signed in August, was given the green light by the European Commission last month.

Raizen will have around $1.6bn cash inflow from Shell’s side, the statement said.

The firm plans to finance its operations with a cash-raising in the market, possible through a corporate bond issue.

The venture is one of Shell’s only investments in renewable energy, after the Anglo-Dutch firm dropped other projects to focus on Raizen last year.

The firm plans to produce 62m tonnes of sugar a year by 2016, which will be used to produce the biofuel.