OPIC Board Approves $60 Million for Ethanol Project in Hungary
September 28, 2010
WASHINGTON, D.C. – The Overseas Private Investment Corporation (OPIC) today announced that its Board of Directors approved $60 million in financing for the construction of a state-of-the-art ethanol plant in Hungary that will double the country’s ethanol output, reduce its dependence on oil, and help Europe meet its growing demand for biofuels.
Ron and Diane Fagen, owners of Fagen, Inc. of Granite Falls, MN, one of the leading design builders of corn ethanol plants in the United States, are also part owners of Pannonia Ethanol Zrt., which will use the OPIC loan guaranty to help build a 200 million liter per year corn ethanol production facility in Dunaföldvár. The plant will be technologically superior to any existing in the country and, in addition to ethanol, will generate dried distillers grains which are used as high-protein animal feed.
The project will support 135 U.S. jobs, and more than 70 permanent jobs in Hungary will be created, most of which will benefit from formal training. And approximately $75 million of initial project funds will be used for local procurement, providing an economic stimulus to local farmers, suppliers and contractors. The project is also projected to generate $79.6 million in U.S. procurement.
“This project will contribute to a cleaner environment by increasing the supply of bioethanol available in Europe, thereby reducing reliance on petroleum products,” said OPIC President and CEO Elizabeth Littlefield. “It will also benefit local farmers in Hungary by stimulating demand for corn. Not least, the project will generate a significant number of local jobs, and substantial transfers of technology and knowledge.”
“We are pleased to partner with a U.S. company like Fagen, Inc, which has been at the forefront of corn ethanol development in the United States, and is working toward transition to second and third generation biofuels. This project succeeds on every level: local economic development; transfer of technology from a leading American firm; and contribution to a cleaner environment in Hungary,” Ms. Littlefield said.
Corn-based ethanol is a renewable energy source that is typically blended with gasoline to reduce gasoline’s greenhouse gas (GHG) emissions when burned. The size of the European ethanol market, currently seven billion liters, is relatively small compared to markets in the United States (50 billion liters). The project will further sustainability in Hungary because it will generate at least 57 percent GHG savings as compared to gasoline, and the equipment and processes it will use are proven to produce more energy than they consume.