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Irish firm buys key biofuel stake.

Byline: By Nigel Stirling

An irish alternative fuels investor has bought a majority stake in a local company building a pounds 50m biofuels plant on Teesside.

Tees Valley Biofuels won planning permission last year for an oilseed rape processing plant on leased land at Vopak's bulk liquid-storage terminal at Seal Sands.

The planning permission given was for a 225,000 tonnes-a-year biofuel plant, produced from an estimated 500,000 tonnes of rapeseed.

Dublin-based Bioverda, which has plants in Germany, and earlier this year announced a joint venture with Richard Branson's Virgin Fuels to invest in bioethanol plants in the US, confirmed it would build a "large scale plant" on the site.

It pledged yesterday to have the plant up and running by the first quarter of 2009 at the latest, following finalisation of debt financing.

Bioverda biofuels development manager Antony Doherty said: "Our intention is to move forward with the project and the next step is securing [debt] finance to bring it to conclusion.

"The project had planning permission granted last year and we are in the process of determining our final designs for the plant."

Mr Doherty said the plant, which is expected to create up to 45 jobs, was "looking at an operational start date of late 2008 or early 2009".

While Tees Valley Biofuels has yet to land any sales, Bioverda's existing relationships in the wider alternative fuels industry could give its future sales a boost.

The Dublin-based company is a wholly owned subsidiary of Irish renewable fuel giant NTR, which has interests in wind energy, biomass, and waste management, and is building plants capable of producing 250,000 tonnes of biofuel annually in Germany.

And it entered a joint venture with Richard Branson earlier this year ( Virgin Bioverda ( to build two ethanol plants in Indiana and Tennessee in the United States, as an early marker in his pledge to spend $3bn over the next 10 years combating climate change.

However, the plant is not at such an advanced stage as that being built by ethanol producer Ensus. That company announced in March that it would build a 400 million litre plant at Wilton after agreeing a 10-year supply agreement with Royal Dutch Shell. Mr Doherty said: "The plant will be debt and equity financed. It is at an early stage and it could yet be up to the banks whether or not we would start without sales already in place.

"But we would be confident that we can take advantage of our extensive knowledge and relationships in the industry and that we can bring the plant up to full production as soon as possible."

The new plant will be a boon to local farmers, with the bulk, if not all, of its oilseed rape requirements likely to come from within the region. Farmer co-operative GrainCo, which has links with Tees Valley Biofuels, will manage the plant's supply relationships, and Bioverda's willingness to maintain the company's existing supply agreements was a decisive factor for shareholders. It is understood that Tees Valley Biofuels, which up until now has been financed by government grants and investors associated with industry ginger group North-East Biofuels, has agreed to sell its remaining shares to Bioverda over time.
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Title Annotation:Business
Publication:The Journal (Newcastle, England)
Date:May 10, 2007
Words:535
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