Three foreign banks ready to finance biofuel projects

At least three foreign banks including Exim Bank of America, Association Francaise des Banques (AFB) and Japan Bank for International Cooperation (JBIC) have expressed their keen interest to take part in the financing of the country's biofuel program, Kontan reported Wednesday.

 

Al Hilal Hamdi, the head of the team for the development of biofuel, said that the team's senior members had met with representatives of the three banks to discuss their participation in providing the funding for the biofuel projects.

 

He said that JBIC was ready to provide unlimited amounts of funds to help develop the biofuel projects. The French development bank and the American bank had also showed their readiness to take part in financing the project, but none had made concrete commitment.

 

However, he said, the American bank had promised to provide loans with maturity of up to 15 years and interest rate of one percent above the London Bank Offered Rates (Libor).

 

According to him, the funds to be provided by the three banks and other financial institutions would be kept in a special account called Green Energy Fund or Biofuel Fund which will be held by the Ministry of Finance.

 

He said that the government will provide 40 percent of funds for the development of upstream biofuel projects such as plantation companies, with interest rates lower than those offered by banks.

 

A number of foreign companies such as Japanese firms Itochu, Mitsui, Mitsubishi, Chinese Seed Group Co and U.S. GL Biofuel have also express their intention to take part in 's biofuel development program, Al Hilal said. (*)