Abengoa Bioenergy of Indiana & Anbengoa Bioenergy of Illinois (United States of America)

Sponsor: Abengoa Bioenergía, S.A.
Activity: Bioethanol production
Industry: Biofuel
Product: Equity
Total investment: over 400 million euros
Resources: FIEX

The general forecast for power consumption in the United States envisages a reduction in the share of liquid and oil-based fuel and a concomitant increase in the use of renewable energy. This will be compounded by the necessary technological restructuring of the automobile industry in the United States, which will necessarily have to increase the mileage delivered by its engines. Moreover, questions such as the USA’s high energy dependence, the existing limits to proven oil reserves and the present cost of extraction have driven the introduction of policies furthering the development of biofuel in general and ethanol in particular.

Abengoa Bioenergía, the Abengoa Group renewable energies subsidiary, produces and develops biofuel, bioethanol and biodiesel from sugar-rich (cereals, sugar beet and cane) and oilseed (soya, sunflower and Jatropha) plants. The company has undertaken a new investment project in the United States, calling for the construction and operation of two corn-based bioethanol production plants. Each plant has a yearly output capacity of 88 million gallons (333 million litres). The two plants, named Abengoa Bioenergy of Indiana and Abengoa Bioenergy of Illinois, will be sited on the banks of the Ohio and Mississippi Rivers, respectively, with ready access to nearly the entire eastern half of the country.

The total investment in this project comes to 400 million euros, 61 % of which will be financed by equity capital and the remaining 38 % by debt. With an equity holding of 30.6 million euros, purchased with funds drawn from the Fund for Foreign Investment (FIEX), the Compañía Española de Financiación del Desarrollo, COFIDES, S.A., will have a minority share of around 10 % when the project is up and running.  

In addition to these two new facilities, Abengoa has four other ethanol plants in operation in the USA, where it is the fifth largest producer. The choice of the United States as the target for new investments is justified both by Abengoa’s experience and the country’s present political and legislative climate, favourable to biofuel production.

Bioenergy has been the Abengoa Group’s highest growth area in recent years and biofuel is expected to account for a growing share of group business in the years to come. In keeping with the US Department of Energy and the Spanish Ministry of Industry, Tourism and Trade policy and the European Union’s 5th Framework Programme, Abengoa is placing its stakes on new technologies and advancing firmly in the commercialization of cellulose-based ethanol technology. At this time, Abengoa is present in the three major biofuel industry markets: USA, Brazil and Europe. Forty per cent of Abengoa Bioenergía’s bioethanol production capacity is presently located in the United States.

COFIDES’s support for Abengoa and its commitment to bioenergy is justified by the fact that biofuel is regarded to be the best alternative to reduce the environmental impact of the transport industry, one of the main sources of polluting emissions. Renewables also constitute an effective means of reducing the dependence on oil-producing countries and contributing to the sustainability of rural populations, which will be directly involved in both the production of prime materials and the development of processing industries.