Only Small-Sized Biofuel Enterprises to be Granted Incentives
Friday, 01 September, 2006 | 13:48 WIB

Tempo Interactive, Jakarta: The government will only grant incentives to small-sized enterprises that develop vegetable-based fuel or biofuel.

“We won't give incentives to large-sized enterprises. It will be especially granted for small- and medium-sized enterprises as well as cooperatives. Banks will clarify this,” Purnomo Yusgiantoro, Energy and Mineral Resources Minister, told reporters yesterday (31/8). Purnomo said that the exact form of the incentives is not yet set.

In his opinion, a great number of enterprises show an interest in the biofuel business such as small- and medium-sized, local, multinational, and other various levels of enterprises.

The government, according to him, has set aside funds of Rp1 trillion for developing biofuel. Between 2009 and 2010, plots needed to develop biofuel will cover six million hectares. “Nevertheless, the interested numbers are around nine million hectares with regard to the development of vegetable-based fuel. We will re-organize matters as regards land clearing,” he said.

Previously, Coordinating Minister for the Economy Boediono has said that the development of biofuel funds of Rp1 trillion is not yet final. The reason is that the fund disbursement is still being discussed by the National Team for Developing Vegetable-Based Fuel upon Accelerating the Reduction of Poverty and Unemployment. The government has invited BRI Bank for funding the program. Other national banks will be requested as well.

It is planned that the government subsidize the disparity rate between the market interest rate and the one that the government considers as proper. It is aimed at boosting biofuel development on the upstream side such as castor oil and oil palm.

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