UK-based investment company Future Capital Partners (FCP) is set to develop a £210m bio-ethanol plant through its unit Future Fuels Partnership in Grimsby, England.

The company stated that the construction of the Grimsby plant will commence by the end of 2013, according to

The development of the refinery is on the lines of European Union’s (EU) guidelines that mandate UK to produce 15% of energy from renewable sources by 2014.

To meet the new targets, Britain is keen on producing 5% of the transportation fuel from renewable sources including bioethanol.

In an interview with the news agency, FCP renewable energy associate director Jonathan Turney remarked that the project is significant if UK is committed to the renewable energy targets.

"A lot of projects in Europe have fallen by the wayside, but the mandated targets remain in place. It’s a significant chunk of the U.K.’s requirement," added Turney.

FCP acquired Appomattox Bio Energy’s plant in Virginia to reduce the costs for its bio-ethanol plant planned in UK. It is expected to reduce the costs by £50m, bringing the plant’s cost down to £160m.

Also, 75% of machinery and equipments will be shipped from Virginia to UK for the new plant.

Meanwhile, Future Fuels Partnership is looking to raise funds of £47m from its investors to facilitate the development of the refinery.

Having raised £4.5m in the first installment, the company is now planning to raise £16m more by the end of April 2013.

It expects to raise the remaining funds by the end of the year.

Turney, however, added that the balance between the funds raised and the project cost would be made up by bank loans, mezzanine finance and by selling equity stakes in the plant.