jatropha investment opportunity

8/9/2019 Jatropha Investment Opportunity

1/6

1

INVESTMENT OPPORTUNITY IN A PROFITABLE

JATROPHA CULTIVATION AND PROCESSING ENTERPRISE

FOR SUSTAINABLE PRODUCTION OF JATROPHA OIL, GREEN ELECTRICITY AND ORGANIC FERTILIZER,

PLUS GENUINE LARGE-SCALE POVERTY REDUCTION, USING A PROVEN FARMING MODEL

An integrated approach to:

Investment

Value proposition


2/6

2

THE PROBLEM

AVIATION GREENHOUSE GAS EMISSIONS AND THEIR IMPACT ON GLOBAL WARMING

The aviation industry is committed to reduce its greenhouse gas emissions. Aviation produces around 2% of

the worlds manmade emissions of carbon dioxide (CO2), expected to increase to around 3% by 2050,

according to the United Nations Intergovernmental Panel on Climate Change (www.ipcc.ch).

At the Copenhagen meeting on Climate Change, airlines, airports, air navigation service providers and

manufacturers were united in their commitment:

to improve fuel efficiency by an average of 1.5% per year to 2020; to stabilize carbon emissions from 2020 with carbon-neutral growth; and to a net reduction in carbon emissions of 50% by 2050 compared to 2005.

As fuel is one of the most critical elements, the aviation

industry is turning to sustainable biofuels to provide a

cleaner source of fuel. The International Air Transport

Association (IATA) has set a goal for its members to use10% alternative fuels by 2017. At the current jet fuel

usage level of between 1.5 and 1.7 billion barrels per

year, this goal would support demand for 200 million

barrels of aviation biofuels per year by 2017.

Following a number of successful test flights with biofuel-

blended jet fuel, the use of biofuels for aviation is now a confirmed option. With the certification process

underway the challenge is to cultivate sufficient quantities of biofuel feedstock to meet IATAs ambitious

blending target.

Biofuel test flights conducted in 2008 and 2009

Carrier Aircraft Partners Test Date BioFuel Blend

B747-400Boeing,

GE Aviation23 Feb 08 Coconut & Babassu 20% one engine

B747-400Boeing,

Rolls-Royce30 Dec 08 Jatropha 50% one engine

B737-800

Boeing,

GE Aviation,

CFM, Honeywell

7 Jan 09 Algae with Jatropha 50% one engine

B747-300

Boeing,

Pratt &Whitney,

Honeywell

30 Jan 09Camelina, Jatropha and Algae

blend50% one engine

A340-600 TBA 12 Oct 09 Alternative Fuel (Gas to Liquid) 50% all 4 engines

B747 GE, Honeywell 23 Nov 09 Camelina 50% one engine

I expect the first aviation biofuels to be certified in 2012. The most

promising biofuel crops are jatropha and camelina Franois Gayet, Secretary General of the Aerospace and Defence Industries Association of Europe - 18

thFebruary 2010

Natural Energy Ventures predicts that the production of aviation biofuel from Jatropha will be the highest value

added product, but Jatropha oil can also be used in biopower generation and for blending in automotive fuels.

These are likely to attract a lower margin.


3/6

3

OUR SOLUTION

TO FARM LARGE HECTARAGE OF RENEWABLE, NON-FOOD ENERGY CROPS FOR THESUSTAINABLE PRODUCTION OF SIGNIFICANT VOLUMES OF AVIATION BIOFUELJatropha, a non-food oil-bearing crop, is presently the energy crop of choice and front runner among a

number of second-generation non-food feedstocks for thesustainable production of aviation biofuels. This is mainly credited

to its considerable oil yield and its sub-zero cold flow characteristics.

Jatropha is a dedicated energy crop, meaning that it is cultivated

almost exclusively for the production of biofuels, removes no land

from food production and does not compete in the edible oils

supply chain due to its slight toxicity. A perennial plant, Jatropha is

a renewable source of energy. Jatropha croplands produce crude

oil, as do conventional oil fields. Jatrophas characteristics and agronomic requirements make it particularly

well-suited to the agro-climatic conditions and farming methods that prevail across most of Southeast Asia.

Natural Energy Ventures has partnered with a Dutch/Indonesian corporate team of expert agronomists(Plantation Group), who pioneered various approaches to Jatropha cultivation and undertook extensive field

research before, in early 2007, commencing a large-scale masterplan project - in collaboration with the

Indonesian Government - to roll out in phases up to 600,000 hectares of Jatropha plantations in Central Java.

Phases I and II (with separate shareholders), totalling 60,000 hectares are already planted, with the majority

in commercial production. Over 150,000 barrels of Jatropha oil were shipped to the EU in 2009.

Having proven the viability of the socio-economic farming model, with growing oil exports to the EU since

2008, the Plantation Group is now ready to launch the next phase of a minimum 25,000 hectares. The

immediate aim is to plant 25,000 hectares prior to the rainy season in late 2010. This phase can be expected

to generate itsfirst oil in 2012, gradually increasing to 500,000 barrels of oil per year from Year 4. As a non-

food feedstock, Jatropha oil will attract premium prices in the high-demand aviation industry.

The full 600,000 hectares of Jatropha, once fully planted and matured, could deliver in excess of 12 million

barrels of biofuel per year. This would represent around 6% of the 200 million barrels of aviation biofuels

required per year by 2017 a significant contribution!

UNIQUE ASPECTS

HOW IS OUR SOLUTION DIFFERENT?

Management of the plantation roll-out will be entrusted to the Plantation Group, which has developed and

proven a socio-economic farming model that works, based on its proprietary systems, know-how and plantresearch base. The Plantation Group has partnered with a state forest company in a collaborative forest

management scheme and undertakes responsibility for the planting of Jatropha on reforestation land for up to

30 years, planning and paying for its planting. In exchange for the cultivation until maturity of the Jatropha

plants, the Plantation Group grants to tenant farmers (typically 4 per hectare) the right to intercrop between

rows of Jatropha with cash crops (spices, grains, fruits and vegetables), carefully selected to maintain soil

health and to provide the farmers with a good income. The Plantation Group provides agronomic support and

advice, maintains detailed records and operates a price support scheme to maintain incomes from cash crops

for the farmers, exporting the excess production to richer markets as organically grown produce. Upon

harvesting, the Plantation Group pays the farmers a premium price for seed deliveries to its collection centres.

A micro-credit loan scheme for the tenant farmers ensures that they can get started as cash crop growers,which is repaid in seed deliveries from Year 3 after planting. The scheme has a sophisticated series of checks

and balances to ensure compliance and to compensate for failures.


4/6

4

INDONESIA

THE IDEAL ENVIRONMENT FOR BIOFUEL FARMING

Indonesia offers a stable, low-cost environment, coupled with supportive government policies. The conditions

on the island of Java are particularly conducive to the sustainable and profitable cultivation of Jatropha,

namely large tracks of denuded land, abundance of landless farmers and favourable rainfall pattern.

Java is the most densely populated island in Indonesia. Although the total area of Java is only 6.5% of the total

area of Indonesia, around 64% of the total population of Indonesia lives on this island. The total state forest

area in Java is 2.9 million ha. It is estimated that 35 million people interact with and depend on these forests in

one way or another. Most of the villages that surround state forests are poor. The villagers have limited

employment opportunities and most have no land rights.

CURRENT PROJECT STATUS

READY TO PLANT 25,000 HECTARES OF JATROPHA IN 2010

A nursery comprising 1000 hectares of top grade semi-mature Jatropha plants that will supply elitemother stock for all the planting areas has already been reserved.

25,000 hectares of state forest land has been reserved, ready for planting. All permits, licences and consents will be in place as a precondition for investment. Management contract with the Plantation Group is in place. Ready supply of up to 100,000 tenant farmers. A ready market for Jatropha oil as feedstock for aviation biofuel.


5/6

5

INVESTMENT PROPOSITION

US$25 MILLION CAPITAL COMMITMENT

Natural Energy Ventures is seeking a capital commitment of US$25 million before the end ofJune 2010to co-

fund the next phase of 25,000 hectares of a 600,000 hectare Jatropha plantation masterplan. For the 2010

planting season we are able to hold the per hectare capital cost at US$1,000. Planning and preparation for

planting will take place from August to October, with actual out-planting scheduled for November/December

2010.

A US$25 million capital commitment will secure a majority stake for 30 years in a highly-profitable integrated

Jatropha enterprise that incorporates the plantation, plus a series of downstream milling and recycling

activities, designed to add significant value in a zero-waste manufacturing chain:

1.2.3.4.5.6.

The Investor will hold the 55% majority stake in an Offshore Investment Holding Company, with the balance

held by a Plantation Group company, representing their contribution of the land-usage rights, permits and

licences, elite planting cultivars, well-established relationships with state and governmental bodies, IP rights in

the operational model and ancillary plant research. The Plantation Group company will have the right to

appoint a majority of board directors of the Offshore Investment Holding Company. Decision making will be

according to parameters set out in the joint venture agreement.

This phase can be expected to generate its first oil in 2012, gradually increasing to 500,000 barrels of oil per

yearon maturity in 4-5 years.

Note: Capital commitments can be made for multiples of 25,000 hectares, i.e. 50,000, 75,000 or 100,000 by

multiplying the desired hectarage x US$1,000 per hectare.

Commitment to a full 600,000 hectares would make the Investor the worlds single largest producer of

Jatropha oil, with production capacity in excess of 12 million barrels per year.

Upland rice intercropping JatrophaJatropha


6/6

6

PROJECT SPONSORS, DEVELOPERS AND MANAGERS

THE PLANTATION GROUP

The Plantation Group is an agricultural technology enterprise with expertise in crops science, agronomyand cultivation technology. It has developed high-yielding Jatropha plant hybrids, which give a superior

yield and oil content. This is the result of more than 6 years of research and development with patented

planting material and hybrid seeds capable of producing up to 3 tons of biofuel per hectare per annum.

The Plantation Group is a leader in Jatropha research and development in Asia and together with itspartners has successfully established first class research and technology bases in Indonesia, Germany,

Netherlands, India, Vietnam and Malaysia. Ongoing research is critical to accelerate the

commercialization of next-generation biofuels and renewable power generation.

Combining agricultural and technological innovations, intellectual property rights and filed patents, thePlantation Group controls all aspects of proven Jatropha research, development, cultivation and

processing, including bio-engineering, high-tech oil extraction and conversion technologies,

commercialization of valuable by-products and the processing of Jatropha into high-grade biodiesel.

With unparalleled access to suitable land banks in excess of one million hectares all across Asia, thePlantation Group pursues the large-scale commercialization of Jatropha plantations in multiple locations.

The Plantation Group is focused on and dedicated to growing high-yielding Jatropha biofuel feedstock onan industrial scale and at competitive cost to meet ever increasing international demand for sustainable,

renewable non-food biofuel feedstocks.

The Plantation Group brings to the table an international network of top quality partners and strategicalliances across multiple industry sectors.

Proof of concept is in place regarding oil yield, fuel properties and commercialization of by-products (bio-fertilizer, bio-gasification, electrification).

All major ingredients for a large-scale plantation roll-out are based on proven and tested proprietaryknow-how and technologies.

NATURAL ENERGYVENTURES

Natural Energy Ventures (NEV) has partnered with the Plantation Group to secure investment funding for the

expansion roll-out of the proven farming model on major new land parcels as part of a 600,000 hectare

Jatropha plantation master plan. NEV has undertaken extensive due diligence and will provide project and

financial oversight. NEV will also undertake the negotiation of trade credit, term loans and off-take contracts

when appropriate and can also develop exit strategies for investors.

Contact

Michael Gorman, Executive Director, Natural Energy Ventures Limited

Representative office: D-2-11 Jalan PJU 8/2, Damansara Perdana, 47820 Petaling Jaya, Selangor, Malaysia

Mobile: +60-12-388 2933 Email: [email protected]

jatropha investment opportunity

Documents