2/15/2005 Bangkok Post - Cheap financing sources, promotional privilegesand price guarantees will be the key measures the government will provideto investors interested in the biodiesel development project, according todeputy permanent secretary for energy Pornchai Rujiprapa.

To date, four investors - CP, Bayer and two palm oil producer associationsin Prachuap Kiri Khan and Chumphon - have expressed interest in thegovernment's ambitious projects, said Energy Minister Prommin Lertsuridej.

Mr Pornchai said the government had not yet secured the cheap financingsources or defined promotional privileges to be provided to the investors.

However, it has already set the buying price for biodiesel at 16.50 bahtper litre and also guaranteed biodiesel volumes to be bought from theinvestors.

As well, the government will guarantee the buying price of palm nuts at2.50 baht per kilogramme.

An investment of about 1.79 billion baht is needed to develop a biodieselcomplex which includes the costs of land to cultivate oil palm, theconstruction of palm oil extraction and refining facilities and biodieseland power plants.

Under a joint study by the Energy and Agriculture ministries, aninvestment totalling 153 billion baht is required to develop 85 biodieselcomplexes, with a combined capacity to produce 8.5 million litres per dayof biodiesel in 2012, when the government plans to blend 10% palm oil with90% diesel oil. The move is to help reduce the consumption of diesel oilby 8.5 million litres per day, which translates into savings of 54.5billion baht in 2012.

Each complex needs 60,000 rai of land to cultivate about 180,000 palm nutsper year to feed the biodiesel plant with a capacity of 100,000 litres perday.

The cost of the oil palm cultivation area was estimated at 1.02 billionbaht while those of palm oil extraction and refining plants were about 200million baht, the power plant 220 million baht and the biodiesel plant 350million baht.