By JAMES A. LOYOLA
Metro Pacific Investments Corporation has scrapped its plan to team up with Basic Energy Corporation for a proposed P6-billion biofuel project involving the construction of two ethanol plants.
In a disclosure to the Philippine Stock Exchange (PSE) yesterday, MPIC said it has served a formal notice to terminate the Memorandum of Understanding it signed with Basic Energy Corporation and Basic Biofuels Corporation last July 10, 2008.
"After an evaluation by MPIC of the biofuels project of BEC and BBC, a decision has been arrived to discontinue the consideration of a possible investment or participation in such biofuels project of BEC and BBC," MPIC said.
BEC president Oscar de Venecia Jr. said earlier that BBC is continuously pursuing landbanking activities until it reaches target core feedstock hectarage enough to supply up to six ethanol plants.
He said each plant will cost around P3 billion and will have a capacity of 150,000 liters per day or 40 million liters a year.
The firm intends to initially focus on two ethanol plants, in Zamboanga and Bukidnon, using sugar, cassava and other crops as feedstock.
Basic will need to raise P6 billion by the end of the year so they can start construction by January 2009 and begin production by 2011. Of this, P4 billion will be borrowed from Banco de Oro Universal Bank and Development Bank of the Philippines while P2 billion will be in the form of equity.
BEC had hoped that the bulk of the equity portion, about 60 percent or P1.2 billion, would come from MPIC which had conducted a due diligence on BBC.
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