Biodiesel plant to go on stream by Dec '06

Andhra Pradesh is all set to become the first state in India to have an integrated state-of-the art oleo biodiesel facility.

The foundation stone for the 300 TPD (tonnes per day) biodiesel plant, being set up at an estimated cost of Rs 140 crore by Naturol BioEnergy Limited (NBEL), was laid by chief minister Y S Rajasekhara Reddy at Vakalapudi, 8 km from Kakinada, on Saturday.

Nearly 300 farmers of Ranga Reddy, Medak, Kadapa and other districts have given their consent to the company for raising jatropha and kanuga plants. The agreement papers in this regard were handed over to the farmers by the chief minister.

"It is the Asia's first global-scale integrated biodiesel project," said Bhaskar Chalasani, managing director and CEO of NBEL. He said that 30 acres of land was acquired and orders for acquiring plant and machinery were being finalised. The commercial production is expected to begin by December 2006 paving the way for incubation of a new generation farmer-oriented industry in the country, he added.

Forecasting tremendous growth of the biodiesel industry in view of abundant natural resources, he said it had the capacity to provide farmers a good and steady income besides strengthening the country's economy by reducing its dependence on oil imports.

Bhaskar said biodiesel would considerably reduce carcinogenic elements and it had the potential to bring in foreign exchange. He said 120,000 acres of dry wasteland could be used for taking up the cultivation of biodiesel plants. According to him, there was a potential to create 12,000 jobs in the agro sector.

He said that IDBI took the initiative of project appraisal by constituting a national-level expert committee comprising scientists in the oleo field, advisors to planning commission, petroleum industries and others.

The bank, upon completing a due diligence of the project, agreed to fund the project along with Andhra Bank, Central Bank, Nabard, and Life Insurance Corporation.

However, Bhaskar expressed concern over lack of basic facilities like water, drains, good roads and street lights at the Industrial Development Area at Vakalapudi.

Meanwhile, in a memorandum to the chief minister, NBEL requested Rajasekhara Reddy to give 50 per cent subsidy on land cost.

The company has acquired 30 acres of land from the Andhra Pradesh Industrial Infrastructure Corporation at Vakalapudi at a cost of Rs 5.67 crore.

Since the area is mostly marshy, it had to spend an additional Rs 2.36 crore on reclamation. This capital was borrowed from term lenders at 11 per cent interest per annum, which works out to nearly Rs 94 lakh per annum.