| The state government, to ensure assured returns to farmers, is mulling the option of a 'risk fund' with a corpus of Rs 1,316 crore and an insurance cover for the bio-diesel crops. |
| It has, in the meanwhile, received proposals from city-based Southern Bio Fuels Limited and Naturol Bio Energy Limited to set up bio-diesel plants at Hyderabad and Kakinada respectively. |
| While Southern Bio has proposed a 30-tonne plant at Choutuppal near Hyderabad, Naturol Bio plant will have 300 tonne-per-day capacity. |
| Of the two projects, Naturol Bio Energy is all set to announce its financial closure in August. It is a Rs 140 crore joint venture between Naturol Bio Energy and an Austrian company, Energea. |
| Buoyed by the state government's keenness on bio-diesel plantation programme, the promoters of the company are making all efforts to make the project a reality at the earliest. |
| According to C S Bhasker, managing director of Naturol, the bio-diesel plant proposed to be set up at Kakinada would be based on the Continuous Trans Reactor Inflow (CTRI) technology patented by Energea, pioneers of viable industrial technology for bio-diesel production. Designed on a multi-feed stock model, the plant can use all the varieties of bio-diesel seed material. |
| Bhasker said that the plant would be the third such joint venture by Energea after a first 40,000 tonne plant at Vienna and another plant with 2.5 lakh tonne per year in the UK. The two joint venture partners will have 50:50 share with day-to-day affairs managed by Naturol Bio. |
| According to Bhasker, a consortium of the Indian development financial institutions and US-based bilateral agencies has already agreed to finance the project. |
| He, however, refused to disclose the names of the consortium members and the particulars of equity, stating that they would announce the details next month as part of the announcement of financial closure. |
| Leaving no stone unturned for ensuring the success of the bio-diesel plantation programme, the government is planning to meet the fund requirement for the risk fund through securitisation of carbon bonds and emissions trading, M G Gopal, secretary of Rain Shadow Area Development Department, told Business Standard. |
| According to him, the department wants to ensure a minimum net annual income of Rs 36,000 on a five-acre bio-diesel plantation during the initial years. |
| "The price of jatropha would be fixed at Rs 5 a kg. But ultimately the yield decides the actual return. We are looking at various options to ensure assured returns to farmers," Gopal said. |
| The state government has planned to cover two lakh acres under bio-diesel plantations in the first year itself. It is proposed to bring four lakh acres each in the second and the third year and five lakh acres in the fifth year in seven rain shadow districts of the state. |
| As the yield in rainfed conditions may not be viable to the farmers, the state government has linked the programme with micro irrigation scheme under which farmers will be given huge subsidy. |
| The export potential of bio-diesel has been one of the motivating factors to entrepreneurs like Bhasker to enter the field. In fact, zeroing in on the port town of Kakinada for establishing the plant is based on this optimism. |
| The mixing of two per cent bio-diesel with convention diesel will become mandatory in Europe from 2005. Besides, the price of bio-diesel in international markets is said to be around Rs 45 as compared to Rs 25 in the Indian market. |
| The Centre has earlier announced a plan which envisages taking up bio-diesel plantation in 10 lakh acres spread across eight states. |
| It was proposed to take up bio-diesel plantation only in forest areas in Tamil Nadu, Gujarat, Tripura and in non-forest areas in Uttar Pradesh, Madhya Pradesh, Maharashtra and Andhra Pradesh. |
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