BP is expanding its biofuels activities in Brazil, with the purchase of shares in Tropical BioEnergia and the acquisition of additional shares in sugar and ethanol producer CNAA.
The company will invest around $71 million (€51.8 million) for the remaining 50% of Tropical BioEnergia from its joint venture partners Maeda Agroindustrial and LDC-SEV Bioenergia.
Following the closure of the deal, BP will be the sole owner of Tropical BioEnergia and its assets, which include an ethanol mill in Edéia, Goiàs state. BP would then own three producing mills in Brazil, with existing facilities located in Itumbiara, Goiás and Ituiutaba, Minas Gerais.
BP has plans to double the operational capacity at Tropical BioEnergia to 5 million tonnes of crushed cane a year. This is the equivalent of 450 million litres of ethanol annually. The mill will also generate an estimated 250GWh of electricity each year for the grid.
BP has also agreed to acquire an additional 3% share of Brazil-based Companhia Nacional de Açúcar e Álcool (CNAA), a producer of sugar and ethanol. It will purchase the shares from LDC Bioenergia for a cash sum of around $25 million.
The energy giant acquired 83% of CNAA's shares in April this year. The most recent deal will see BP own 99.97% of the shares of the company, following the conversion of CNAA's long-term debt to equity. Private shareholders own the remaining shares.