Meta Bioetanol seeks funding for new rural biorefinery projects in Mexico

Type of post: NEWS.

A private team of international promoters is working on the development of  agribusiness projects in Mexico, with great environmental, economic and social potential impact, that will be based on the production of bioethanol. Recently, they have registered a Mexican company called Meta Bioetanol S.A de C.V. whose objective is to make these projects a reality, which means a great step for the promotion of the rural bioeconomy in the Mexican zones where they are finally installed. In this post, we will know the background and the current status of this initiative. Those interested in participating in the investment opportunity described below, can write to the Blog (info@biorefinno.com) to obtain direct contact with the promoters.

Background

In Mexico, the boost to the bioethanol industry has been gradual and modest, in comparison with other countries in the region, concentrating mainly on the demand side with regulations that allow its incorporation up to 10% in gasoline, but without a policy well defined in terms of national production. Currently, the Mexican gasoline market has the potential to consume 60-80 mbd (thousands of barrels per day) of bioethanol. According to official estimates, by 2020 the national production of bioethanol could reach 20 mbd. In other words, less than 30% of current demand. Some analysts point out that, in order to satisfy the local bioethanol market dozens of plants of 1 mbd or greater capacity could be required in the coming years. That is to say, it is a market with great possibilities for expansion.

On the other hand, Mexico has the basic conditions required for the development of a bioeconomy based on the potential of its fields, including: agricultural tradition; availability of arable land and field technology; broad and open markets for agricultural products and fuels. A large-scale production of bioethanol in Mexico would contribute to the country's energy security and would have great social and economic impact in rural areas, which according to estimates could lead to the creation of hundreds of thousands of jobs. Likewise, the traction of this conventional high volume ethanol market would be the basis for the development of a more complex bioeconomy in which green chemicals, bioplastics, biomaterials and bioenergy, ensure the transition towards a more sustainable society.

Figure 1. Sweet sorghum. The feedstock of the plants will be sweet sorghum or sugar cane, to be decided based on field tests.

The projects

Location	Areas with high yield of the crop selected as feedstock, socially sensitive and with high priority for the social and economic development from the central and regional governments. Ongoing talks with interested agricultural producers from the states of Guanajuato, Veracruz and Querétaro.
Feedstock	Sweet sorghum or sugar cane, to be decided based on field tests.
Products and production capacity	Two alternatives are being evaluated: - 30,000 litres per day of ethanol; byproduct: fodder. - 150,000 litres per day (approximately, 1 mbd); byproducts: electricity (18 MWh) and fodder.
Benefits	- Generation of jobs using local resources. The creation of 500 direct and 2,000 indirect jobs is estimated, for projects of 150,000 litres per day of bioethanol. And around 50 to 60 direct jobs and 300 to 400 indirect ones for a plant of 30,000 litres per day. - Economic and social boost of rural areas. - Development of alternative energy sources for transport and energy. - Use of modern agricultural systems and creation of agroindustrial companies.
Phases	- Phase 1. Accomplished: Conceptualization of the projects Include preliminary analysis of technical-economic feasibility and social impact; preliminary review of feedstock options and contact with potential suppliers; preliminary evaluation of agricultural areas for the location of the agroindustrial complex; preliminary market study for the product and byproducts: ethanol, electricity and fodder; preliminary evaluation of the availability of technology for the industrial process and ongoing talks with suppliers; general review of the applicable regulatory framework; preparation of a preliminary financing strategy. Time invested: 12 months. - Phase 2: Obtaining seed capital in the order of US$ one million to carry out a series of studies and specific priority tasks, already identified. Estimated time: 9-12 months. - Phase 3: Ensure funding as equity or debt to start agricultural operations, the construction of ethanol plants, the start-up of operations and the implementation of the corporate and commercial operations of the promoter company. Estimated project execution time: 18 to 30 months, depending on the plant capacities.

Investment opportunity

Promoters are seeking for project financing through venture capital, to undertake the required technical and economic studies, the regulatory waybill, the obtaining of licences and permits, and other well defined tasks (Phase 2) and a combination of equity and/or debt for the implementation of the project(s).

- The investment for Phase 2 is risk seed capital. The investor will be a founding partner and shareholder of the promoter company. The percentage of participation in the company will depend on the investment of the participant and his contribution.

- The investment for Phase 3 will be considered as equity or debt. The capital required will depend on the size and number of plants.

Promoter team

- Mauro Hoyer Romero: Over 35 years of international experience in the energy sector. MBA, Henley Management College / Brunel University, England; Engineer in Energy and Fuels, University of Leeds, England.

- Ana María Sánchez Hernández: More than 20 years of experience in the energy sector, public and private, in Mexico. Bachelor of Economics, National Polytechnic Institute, Mexico; Master in International Studies, University of Sydney, Australia.

- Mauricio Méndez Santa Cruz: More than 25 years of experience in social policies and citizen participation, in the public and academic sectors. PhD. and MA. in Social Policy and Administration, University of Kent, England; Bachelor in International Relations, University of the Americas, Puebla, Mexico.

- Ignacio Covarrubias Gutiérrez (Agro-technical Advisor):, PhD. in Agro-Industrial Economic Problems, Autonomous University of Chapingo. Deputy Director of Research, Liaison and Postgraduate Studies. Department of Agro-industrial Engineering.  Autonomous University of  Chapingo, Mexico.
- Rommel Santiago Pelayo Villeda (EPC Advisor). More than 20 years of international experience in industrial projects. Specialized in direction, execution, commissioning and operations of energy projects. Mechanical Engineer, Universidad Nacional Experimental Politécnica “Antonio José De Sucre”, Puerto Ordaz, Venezuela; MSc. in Mechanical Engineer, Universidad de Oriente, Venezuela.