15 Investors Interested in Biofuel Project
Wednesday, 26 July, 2006 | 16:02 WIB

Tempo Interactive, Jakarta: As many as 15 investors have stated their interest in investing in the biofuel project that will require funding of Rp200 trillion.

Al Hilal Hamdi, Head of the National Team for Developing Vegetable-Based Fuels, has explained that one of the investors is Itochu, a Japanese company, which has prepared to process ethanol from sugarcane in Lampung with a total investment of US$25 million.

Other investors are PT Perkebunan Nusantara X and the Sampoerna Group who will process sugarcane and cassava in East Java with a total investment of US$80 million.

“They need 14 months to work on the project, starting from the supply of base materials until the construction of the factory,” Al Hilal Hamdi told reporters yesterday (25/7).

He added that some national banks are ready to disburse funding of Rp100 trillion and the remainder will be provided by investors.

The funds will be utilized to develop national vegetable-based fuels.

Activities will include breeding, plant-processing technology, and harvesting as well as fabrication activities such as producing fuel products to replace premium petrol and manufacturing kerosene and automotive diesel-oil supplements.

According to Al Hilal, the government is preparing an incentive scheme so as to accelerate the biofuel industry.

These incentives consisting research, investment and trade.

In terms of research, he cited that there is an income tax relief for any company researching for biofuel.
Meanwhile, as for trade, it is proposed that at its minimum level tax relief will be equivalent to export tax.

Kusmayanto Kadiman, the State Minister for Research and Technology, said that there will be alternative sources of fund for developing biofuel.

The government will be able to make use of pollution compensation funds for developed countries as arranged by the Tokyo Protocol.

“Our success in providing biofuel means that we reduce world pollution. Meanwhile, developed countries' pollution level remains high so that we can ask for compensation fund. This should be made use of,” he said.

In terms of the market, PT Pertamina and PLN can be the buyers of biofuel products.

“As of 2010, all products will enter. So, 10 percent of them will be utilized for vehicles' fuel and 50 percent of them for power plants fuel.”

Fery Firmansyah and Agus Supriyanto
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