Advanced Ethanol project in Moldova

EnergyOne is working with Seminte Nord to develop a 10 Million gallon per year advanced ethanol project in northern Moldova.

Summary

BioCombustibil SRL was formed for the purpose of developing a small scale bio-ethanol production facility in the Republic of Moldova near the northern town of Drochia. The project is being sponsored by JSC Seminte Nord, one of the largest and most successful corn seed and grain companies in the Republic of Moldova.  BioCombustibil’s focus is to build highly efficient small scale biofuel production located near feedstock and optimized to match local markets.  The project will take advantage of the latest biofuel production technology while leveraging existing infrastructure, and strategic partnerships with farmers and end users to produce low cost ethanol, animal feed, and CO2 for both local and EU markets.  The nameplate capacity of this facility is 10 MGY (35,000 MT) of bio-ethanol.

Project Highlights

The process employed at the facility uses gasification of biomass to generate all required energy, thus providing maximum possible GHG reductions and qualifying the project for additional green tags, carbon credits, and REC. According to EU guidelines, ethanol produced in this fashion is considered a sustainable fuel and recommended for purchases up to and after 2017 when stricter GHG guidelines kick in for other ethanol producers. Products are ethanol, CO2, and DDGS; site has 4 operational rail spurs.  Seminte Nord will manage, operate, and maintain the entire facility.

The Opportunity

Moldova sits at the crossroads of the European Union and the Commonwealth of Independent States (CIS).  Its unique location provides for easy logistics, low labor costs, and proximity to large demand markets to distribute plant production.  Moldova is a member of the WTO, shares a border with EU member state Romania, and has preferential trade access to the EU (Autonomous Trade Preferences).  Moldova also grows large quantities of corn which are underutilized or have low value at the moment, but can be very efficiently used for our biofuels production purposes. Currently, no ethanol manufacturing plants exists in Moldova, Romania or any of the neighboring countries. Substantial unmet demand is currently served by importing ethanol from Germany, Spain, Turkey, US, India, Brazil, and other countries which commands high prices for end users.

Market Access

There are also significant advantages on the production and distribution side.  Moldova offers low labor costs and Autonomous Trade Preferences (ATP) trade status leading to duty free trade in ethanol DDGS, and Carbon Dioxide with the EU.  This makes Bio Combustibil very competitive with foreign imports of ethanol which are subject to a steep tarriff in the EU.

Feedstock

Most of the ethanol production in Europe uses wheat and sugar beets as feedstocks.  The supply of these feedstocks is limited leading to higher prices and higher production cost than corn based ethanol.  Corn is the lowest cost feedstock available for commercial ethanol production in Europe.  BioCombustibil will use locally grown crops in a highly efficient process leading to lower production costs.  This makes the BioCombustibil plant more competitive and more profitable than other ethanol plants in Europe.  

JSC Seminte Nord has over 20 years experience dealing with local farmers and government officials.  The company works with most of the corn growers in the region and offers vital services to them.  It not only provides farmers with corn seeds  and credit but also buys back their corn at harvest.  The company also operates a large regional grain elevator in Drochia which is the only outlet for most of the local grain.  This close working relationship with farmers allows Seminte Nord to offer a long term fixed price corn supply contract to Biocombustibil.

Site and Infrastructure

Seminte Nord also provides a unique opportunity to leverage existing infrastructure for the purpose of a biofuel plant.  The Drochia site consists of 14 hectares (35 acres) and is home to a large regional grain elevator facility specializing in corn seed production and grain trading.  Existing assets include a 1.2 million bushel grain elevator, a 2 million gallon fuel terminal, lab facilities, scales, and a large warehouse suitable for production purposes.  In addition, the location is served by rail, has good road access, high voltage power, electric substation, and access to a natural gas pipeline.  This site also provides plentiful water resources.

Timeline

Construction of BioCombustibil facility is expected to be completed by Fagen/ICM and should take eight to ten months. The short timeframe is due to the availability of facility engineering and fabrication, the site and business preparation that Seminte Nord has undergone, and the completeness of all environmental permitting.

Project Financial Requirements

The total project cost for the 10 MGY plant is $50 million dollars.