MANILA - State-run PNOC-Alternative Fuels Corp yesterday said it has won a $1.3-billion deal with British firm NRG Chemical Engineering to build biofuel facilities in the Philippines.

PNOC-AFC said it will establish a new firm with NRG to invest in the sector over a five-year period. The British firm would own 70 percent of the venture, while PNOC-AFC will have 30 percent. "NRG has been looking for a possible partner in the region and they have decided to invest in the Philippines," PNOC-AFC president and chief executive Peter Abaya said.

The two firms plan to build a 3.5 million metric ton bio-refinery at a cost of $455 million, and a $600 million plantation for jatropha, a plant material which is used in producing biofuels.

They also plan to build a 300,000 metric ton bio-ethanol plant at a cost of $200 million.

President Gloria Arroyo signed the Biofuels Act of 2006 early this year, hoping to reduce the country's dependence on imported crude oil in favor of alternative fuels produced locally.

The law mandates the blending of 1 percent bio-diesel in all diesel products starting this month. By 2009, all gasoline products to be sold in the country should have a 5 percent ethanol mix.*AFP

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