global trends in biofuel strongfinancestrong in forest-rich countries of.pdfVIP

CIFOR infobriefs provide concise, accurate, peer-reviewed information on current topics in forest research No. 36, January 2011 Biofuel finance Global trends in biofuel finance in forest-rich countries of Asia, Africa and Latin America and implications for governance a b Jan Willem van Gelder with Laura German Key points • Since 2000, US$ 2.0-2.7 billion has been invested in feedstock cultivation for biofuel in 16 forest-rich countries, mostly in oil palm and sugarcane. An additional US$ 5.7-6.7 billion has been invested in biofuel production, especially sugar-based ethanol. • While investments in some countries are driven by domestic policies to reduce fossil fuel imports, most are export driven. Sugar-based ethanol offers more opportunities to capture value added than biodiesel feedstocks which are amenable to export and processing abroad. • Financing sources for biofuel and related feedstock investments are very diverse, involving domestic and foreign entrepreneurs, state-owned companies, government agencies, public and private banks and institutional investors. Foreign investors play an important role in most forest-rich countries, especially in Africa. • To sustain growing demand, significant amounts of new investment are anticipated. • Most investors are not yet effectively addressing sustainability challenges in the biofuel sector because they lack responsible investment policies or they are insufficiently robust. Only a few banks have developed responsible