Investec may invest in biodiesel, gas-fired power in Australia


Investec, the owner of South Africa's fifth-biggest bank, is studying opportunities to fund biodiesel and natural gas-fired power projects in Australia to expand investments in clean energy.The bank is talking to potential developers of biodiesel plants, said Mark Schneider, clean energy specialist at Investec Bank (Australia) Ltd.'s specialised finance unit. It also wants to link with a gas-fired power specialist to finance plants to meet rising demand, he said.Investec helped fund expansion by Melbourne-based renewable energy company Viridis Clean Energy Group, which sold shares to the public last year, and has a stake in Brisbane-based Global Ethanol Holdings Ltd. The bank is also developing wind energy projects in Australia and New Zealand, spurred by rising demand for clean energy and government subsidies for renewable power.“We're certainly very interested in bio-fuels'' and biodiesel as well as ethanol, Schneider said in an interview in Sydney on July 24. “We are talking to a few would-be promoters or developers in the area about opportunities we can fund.”A biodiesel project may be the bank's next transaction in Australia, Schneider said. Bio-fuels are liquids such as ethanol, made from sugar or grains. Bio-diesel is produced from vegetable oils or animal fats.Australia's government has a target for 350-million liters a year of production of biofuels by 2010 to help reduce pollution.Investec, which has shares traded in Johannesburg and London, almost tripled profit in fiscal 2006 to 315,1-million pounds ($580-million), helped by a surge in stock markets, realization of profits on private-equity investments and higher demand for loans from its private-banking customers.The bank's stake in Global Ethanol, which plans to raise $350-million in a share sale, will fall to less than 40 percent from 70 percent at present through Global Ethanol's stock offer, Schneider said.Global Ethanol plans to sell shares at between A$4,60 and A$5,80 apiece depending on demand, according to an offer document lodged with the Australian Securities and Investments Commission on July 21. About $225-million of the funds raised is earmarked for expansion and development of the company's ethanol projects in the US, where demand is surging after a law passed last year requiring oil companies to blend 7,5-billion gallons of ethanol a year into gasoline supplies by 2012.Global Ethanol will probably seek to develop plants in Australia after an initial 12-24 months focusing on the planned US projects, Schneider said. “It's not an idle name even though all the assets at the moment are in the US,” he said. “We do see a future for ethanol in Australia as ethanol becomes a globally traded commodity.”Investec's Australian unit in October formed a joint venture with Windlab Systems Pty to jointly develop wind farms in Australia and overseas, furthering its plan to develop an international portfolio of wind energy projects. The most advanced of its projects are a possible wind farm in Victoria state, and some in New Zealand, while it is also studying a project in South Africa, Schneider said.Investec may seek private equity investors for the wind business when it needs more capital to develop the wind farms, Schneider said. Investec has previously arranged private equity investment for funeral company Invocare Ltd. and mobile phone retailer Fone Zone Pty among others.