The Hindu Business Line : IFC, Rabo bank agree to fund Southern Online's expansions

TWO of the leading international funding agencies - International Finance Corporation (IFC) and Rabo Bank - have agreed to fund the future expansions of Southern Online Bio Technologies Ltd (SBT), the Hyderabad-based company that is currently setting up a bio-diesel project partly with grants from the German Government.

The Rs 17.1-crore project for producing 30 tonnes of bio-diesel per day is coming up in Nalgonda district of Andhra Pradesh in alliance with the German major Lurgi Life Science.

Talking to newspersons here on Wednesday, the SBT Managing Director, Mr N. Satish Kumar, said the company had earlier approached IFC and Rabo Bank for debt support for the bio-diesel project. "Both these funding agencies have agreed to fund the future expansions of our company. They have retained the first right of refusal in funding our expansions. We may go in for further expansion some time in 2008," he said.

The company proposes to focus more on large fleet operators for bulk sale of bio-diesel. It has already received letters of intent from the Indian Railways and Vizag Municipal Corporation and expects to enter into an agreement shortly with the Andhra Pradesh State Road Transport Corporation (APSRTC). Further, the company also plans to open few retail outlets for sale of bio-diesel, Mr Satish Kumar said.

Admitting that the off-take of bio-diesel would be dependent upon the company supplying the fuel at prices lower than the retail price of petroleum-based diesel, Mr Kumar said the company proposes to keep the price of bio-diesel lower at least by Re 1 per litre initially.

He said the company does not envisage any difficulty in procurement of the requisite raw material for bio-diesel production. The project requires around 10,000 tonnes of seeds of pongamia and jatropha per annum. Though the seed is adequately available in Andhra Pradesh, the company proposes to explore the options of buying from neighbouring States as well.

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