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BP creating world-class bioenergy company

BP creating world-class bioenergy company
BP has agreed to form a 50:50 joint venture with Bunge – a leader in agriculture, food and ingredients - that will create a leading bioenergy company in one of the world’s largest fastgrowing markets for biofuels, Trend reports citing the company.
"BP will combine its Brazilian biofuels and biopower businesses with that of Bunge to create a world-scale, highly-efficient producer of sugarcane ethanol in Brazil, BP Bunge Bioenergia. BP’s interest in the new venture will grow its existing biofuels business by more than 50 percent,” said the company.
Brazil is the world’s second largest and most integrated market for ethanol as a transportation fuel with demand forecast to grow rapidly. The majority of vehicles in the country – around 70 percent – are already able to run on ethanol and the country’s demand for ethanol is estimated to increase by around 70 percent by 2030.
Reportedly, BP Bunge Bioenergia will have 11 biofuels sites in Brazil. With 32 million metric tonnes of combined crushing capacity per year, the joint venture will have the flexibility to produce a mix of ethanol and sugar. It will also generate renewable electricity - fuelled by waste biomass from the sugar cane - through its cogeneration facilities to power all its sites and sell surplus electricity to the Brazilian power grid.
Under their agreement, BP and Bunge will each contribute their existing Brazilian biofuel, biopower and sugar businesses into the new, equally-owned, standalone joint venture. On completion, BP will pay Bunge $75 million, subject to customary closing adjustments, and the joint venture will assume $700 million of non-recourse debt associated with Bunge’s assets.
Subject to satisfaction of conditions precedent, including obtaining the necessary regulatory clearances and approval, the deal is expected to complete in the fourth quarter of 2019.
Following completion, the aim is for BP Bunge Bioenergia to generate significant operational and financial synergies, through scale efficiencies and by applying best practices, optimised technologies and operational capabilities across all the assets of the new business.
The new business is expected to be headquartered in São Paulo. Mario Lindenhayn from BP will be executive chairman, Geovane Consul from Bunge, chief executive, and Marcus Schlosser from BP, chief financial officer. BP and Bunge will have equal representation on the board of directors.

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