UPDATE 1-Brazil says investment to raise ethanol output http://today.reuters.com/news/articleinvesting.aspx?type=comktnews&storyID=2007-01-22T191248Z_01_N22484808_RTRIDST_0_BRAZIL-ETHANOL-INVESTMENT-UPDATE-1.XML
Mon Jan 22, 2007
(Adds quote, details, comparative forecast)
BRASILIA, Jan 22 (Reuters) - Brazil will invest 17.4 billion reais ($8.18 billion) in renewable fuels over the next four years, which is expected to boost ethanol output by 40 percent, the Mines and Energy Minister said on Monday.
Minister Silas Rondeau said Brazil's ethanol output would grow to 23.3 billion liters from the current 16.7 billion by 2010 and biodiesel production would grow to 3.3 billion liters from the roughly 800 million liters now.
The investments are part of a plan that President Luiz Inacio Lula da Silva unveiled on Monday to speed economic growth in Latin America's largest country by steering cash into long-delayed infrastructure projects.
An advisor to the minister said the figure was a forecast of investment from the public and private sectors combined and that no Treasury funds were included. Government investment would come through the state-run oil and gas company Petrobras (PBR.N: Quote, Profile , Research)(PETR4.SA: Quote, Profile , Research).
"We're still negotiating with the private sector," said Jose Sergio Gabrielli, president of Petrobras. "The share (of the company's investment) is not predetermined."
Brazil has one of the world's most developed biofuels markets with over 30,000 filling stations offering motorists cane-based fuel ethanol. The country is also about to make a 2 percent biodiesel blend mandatory nationally in 2008.
The ministry said that of the total investment in the biofuels sector 16.2 billion reais would go into the cane ethanol sector, with 12.1 billion reais going toward production and 4.1 billion reais to distribution, such as pipelines.
Last week, the president of Brazil's Cane Industry Association (Unica), Eduardo Pereira de Carvalho, said that current investments in cane milling and distillation capacity were estimated at $15 billion dollars. This figure includes sugar refining as well.
The remaining 1.2 billion reais in investments would go into biodiesel to boost output, the ministry said.
($1=2.13 reais)
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