A joint development agreement to build and operate a 75 million gallon per year production biodiesel plant near Rosario, Argentina has been signed by AE Biofuels and DS Development. According to the companies plant permits and feedstock agreements are already in place, although construction of the biodiesel plant is still subject to obtaining necessary project financing. Plant completion is expected in late 2009.

The biodiesel facility will be built by De Smet Engineers & Contractors with technology and engineering being provided by Desmet Ballestra. Desmet Ballestra is also the technology partner for AE Biofuels' current palm oil and glycerin refining projects and 50 million gallon biodiesel plant in Kakinada, India.

The facility will have a feedstock capacity, primarily soy oil, of 250,000 tons per year and is expected to produce 75 million gallons of biodiesel and 25,000 metric tons of glycerin annually. The glycerin produced at the Argentina plant may be processed into pharmaceutical-grade glycerin at the company's Kakinada, India plant.

"Today marks an important milestone for our company," said Eric McAfee, chairman and CEO of AE Biofuels, Inc. "By establishing a foothold in Argentina for our expanding biodiesel operations, we are able to take advantage of a beneficial tariff environment that would currently provide an operating margin of approximately 25 percent while contributing materially to the local economy. This plant will increase our biodiesel production capacity during a global shortage of diesel fuel and record high diesel prices and provide significant value for our shareholders. We are pleased to partner again with Desmet, a company known worldwide for its quality work in the biofuels arena."

"This Project represents for DS Development a great opportunity to confirm a strong position in providing turnkey support & projects for the Bioenergy sector. Partnering with AE Biofuels opens the door for new opportunities in the development of alternative and second generation Biofuel Projects," said Ivan Stocker, Director of DS Development.