CNE acquires 24% equity of Hungarian ethanol plant

China New Energy (CNE), a bioenergy technology solutions provider, has invested €250,000 to acquire a 24% stake in the Hungary-based Visontai Bioetanol Fejlesztő Korlátolt Felelősségű Társaság (Visontai) bioethanol plant.

In November 2013, CNE was contracted by Visontai to design and construct a biorefinery for the production of 150,000 litres per day of corn-based ethanol. Under the terms of this agreement, CNE has the option to conditionally subscribe for, and to acquire, additional equity in Visontai.

CNE says it has exercised this right with the acquisition of 24% of the equity and, subject to certain contract provisions, could acquire up to 50% of the equity with a further investment of €250,000.

The biorefinery will take 13 months to build and is scheduled to enter production in 2017. Visontai will operate it, while CNE will supply its proprietary pre-treatment, fermentation, distillation and dehydration technology to the project. It will also provide long-term training, support and maintenance. Local project partners will complete the civil engineering and construction of the biorefinery.

The contract value for CNE is approximately €34 million, of which approximately €11 million will be due by CNE to local subcontractors. Stage payments will be due to CNE based on construction milestones. The corn feedstock has already been contracted from Hungarian farmers and a long term off-take for the ethanol has been agreed with an international commodity trader.

Mr Yu, chairman of CNE, says: 'It has been a strategic goal of CNE for some time to buy into a biorefinery project and deliver a recurring income from the sales of bioethanol. We are delighted to acquire a stake in this European project and look forward to the successful development of the business.'