Canadian company Dynamotive Energy Systems Corporation (OTCBB: DYMTF) has signed an agreement with the Provincial Government of Corrientes in Argentina, and the engineering firm TECNA to develop up to six biofuel plants in the region.

The joint focus of the agreement is to tackle environmental issues arising from vast stockpiles of decomposing wood waste and substantially increase electricity generating capacity in this forested region of Argentina.

The agreement is subject to further negotiation and execution of definitive and binding agreements, as well as the conclusion of suitable financial arrangements which are currently under discussion. 

It is proposed the first two facilities will produce ‘green’ electricity using BioOil for fuel and will be in Virasoro and Santa Rosa, about 500 miles north of Buenos Aires. They will each provide a minimum of six to eight megawatts of export capacity. The remaining four plants would be for BioOil production only.

The entire six-plant project cost is projected to be between US $120 and $140 million. Funding is anticipated to be provided by a group of banks and other private sources.

Commenting on the agreement, Governor Arturo Alejandro Colombi stated, “For us, the agreement signed with Dynamotive signifies another step along the path of economic growth and environmental husbandry that our administration is engaged upon.

“We are very pleased that Dynamotive has chosen our province to establish the first plants in the country and it reflects well on the legal and economic framework that we have established to facilitate investment and encourage economic activity in our province.”

Dynamotive President and CEO, Andrew Kingston, said, “This has the potential to be our biggest project to date and one we feel could pave the way for additional such projects in South America which is becoming keenly aware of its biomass assets and the opportunities they afford for producing renewable, clean energy and reducing dependency on fossil fuel imports used in industry.

“The project in Corrientes has major potential environmental benefits, starting with the reduction of the enormous stockpiles of aging sawdust waste. This waste is also burned without deriving any energy benefit and emits large quantities of carbon dioxide. As this biomass waste deteriorates, it also releases toxic compounds into water, land and the air, including cetanol, which poses a risk to local water resources, and methane, a major greenhouse gas.”

Kingston said the BioOil plants, which are carbon and greenhouse gas neutral, are planned for forestry communities where little or no electricity is available at present. “BioOil is an excellent gas turbine fuel as we have demonstrated with our 2.5 MW plant in West Lorne, Ontario, where BioOil is produced from sawdust.

“Producing power cost-effectively and cleanly is one of the keys to economic prosperity and security whether in Argentina or any other country. Argentina is blessed with considerable forest resources and now it will be able to derive considerable benefit from these forest residues.”

Kingston concluded: “Our fast-pyrolysis technology, based on a throughput of about 200 tonnes of biomass daily, is a proven and highly cost effective method of turning agricultural and forest residues into power and renewable industrial fuel. Furthermore, we have pioneered the technology as a readily-transportable series of modules that can be installed virtually anywhere in the world.”