-500 permanent jobs to be created

A Peruvian Biofuels project is set to receive US$25M from the IDB to fund an ethanol refinery, sugar plantation and electricity plant that will generate 500 permanent jobs for local communities.

In a press release the IDB said the project is an initiative of Maple Energy Plc, an energy company that has focused solely on Peru since 1994. It is known as Maple Etanol and is listed on the London Stock Exchange’s Alternative Investment Market and on the Lima Stock Exchange. It requires a total investment of US$245.5 million.

Maple Etanol will create about 1,000 jobs during the construction phase and 500 ongoing jobs in the operating phase while increasing local demand for services such as transportation, safety and food. In its effort to use local goods and services as much as possible, Maple Etanol will receive assistance from Netherlands development agency SNV which has extensive experience in developing inclusive businesses.

The project entails building a sugarcane ethanol refinery with production capacity of 35 million gallons of fuel per year. It includes planting, farming and milling 7,800 hectares of sugarcane – the raw material for refining ethanol- on a 14,000-hectare plantation that Maple Energy bought from the government of Piura and private individuals. The land comprises desert and or/arid areas that Maple Etanol will convert into highly productive land, introducing innovative irrigation methods and mechanizing the planting and harvesting processes.

Mechanization and the use of drip irrigation will allow Maple Etanol to achieve yields of up to 153 tons of sugarcane per hectare. The global average yield for this crop is about 100 tons per hectare. The project will also include the construction of a 37-megawatt electricity cogeneration plant to supply power for operations. It will burn sugarcane waste from the ethanol distillation process to provide 100% of the project’s electricity needs and enable Maple Etanol to sell the excess electricity to Peru’s interconnected power system.

According to the release in addition to the sum from the IDB, Maple Etanol will receive co-financing from two other multilateral agencies and a private commercial bank. The Andean Development Corporation will finance US$65M and the Entrepreneurial Development Bank of the Netherlands will provide US$25M. Local private bank Interbank will also fund US$25M. The IDB loan will have a term of 12.5 years with a 2.5 year grace period. The interest rate will be LIBOR plus a differential or the fixed-rate equivalent.