| RIO DE JANEIRO, April 22
RIO DE JANEIRO, April 22 The heated global
food-versus-fuel debate has changed the way the Inter-American
Development Bank (IDB) evaluates financing of biofuel projects
that could siphon off staples like corn or soybeans, a senior
official said on Tuesday.
"It's a good thing that voices have been raised in that
debate. Biofuels are not a complete panacea, we have to
distinguish between what are the better sectors of biofuels,"
IDB senior advisor Nathaniel Jackson said on the sidelines of
the Latin American Renewable Energy Financing Forum.
The UN's Food and Agriculture Organization said earlier
this month a global increase in biofuels production threatens
to make food for Latin America's poor less accessible.
Critics have questioned the environmental and social
benefits of biofuels, putting major producers like Brazil on
IDB's Jackson and other speakers at the forum said
renewable energy including biofuels had a huge growth
potential, but called for a smart, selective approach.
Jackson said the bank was totally discarding projects to
produce ethanol from corn as is being done in the United
States. While it was still interested in biofuels made from soy
and sugar cane, it preferred to finance plants like jatropha,
which are non-edible and require no arable land, he said.
"The ideal will be something like jatropha which clearly
has no impact on food prices," Jackson said. "Now, if they come
to us with anything that would directly impact food prices, we
say that's probably not what we're looking for..."
"We think sorghum would be appropriate, but for instance
soy would not be ideal, as it impacts (food) prices. We do
reckon sugar price does have an impact. It is by and large less
desirable than jatropha, but then again, we have to look at the
overall development picture," he told Reuters.
He said the bank has overhauled its system of evaluating
projects and now pays more attention to factors like prices,
energy efficiency and regional development. That often means
rejecting funding to some projects even if they work out
financially and have government backing.
The IDB was supporting sugar cane-based biofuels in
Brazil's poor northeast, but would not do the same for the
wealthy southeast, the main cane-growing region, he said.
"If there's a sugar cane project coming our way we ask
'where is it'? If it's up there in the area we want to target,
which the government wants to develop, then from that
standpoint it comes into the equation," Jackson said.
The IDB is expanding financing of biofuels to 10 percent of
its $4 billion Latin American portfolio this year from less
than 1 percent. At the end of 2008 bioenergy should have about
the same share as traditional energy in the IDB budget.
(Editing by David Gregorio)