Indian conglomerate Jindal Steel and Power (JSPL) has collaborated with New Zealand-based renewable energy company Lanzatech to develop an alternative ethanol production technology.
The said technology aims to produce the bio-fuel from unused blast furnace (BF) gas.
JSPL, following the development of the technology, is planning to launch a production scale plant either in Angul, Odisha or Raigarh, Chhattisgarh by end of 2015, reported The Daily Pioneer.
The move comes in the wake of a mandate issued by the Cabinet Committee on Economic Affairs (CCEA) to blend 5 per cent ethanol with petrol.
JSPL expects the production capacity of 150,000 tonnes of ethanol per annum through its first BF in 2015; subsequently raising it to 500,000 tonnes following the addition of a second BF.
The company added that the pact with Lanzatech is limited to developing technology known as BF Gas to Ethanol.
JSPL noted that the plant will be funded by the company and the outer limit for debt-to-equity ratio is fixed at 2:1.
A source familiar with the development stated that the company would turn to foreign borrowings alongside exploring other methods of fund raising such as loan from domestic banks or through export credit agencies (ECAs).