Cordiant funds a $214m renewables plant in Hungary



April 26 2011

Issued on behalf of Cordiant Capital by Mattison Public Relations

Cordiant funds a $214m renewables plant in Hungary

Meets booming demand for renewable fuels
-Valuable agricultural by-products

Montreal, Canada [April 26 2011]. Cordiant Capital Inc. (“Cordiant”), the Montreal based fund manager that specialises in loans to emerging markets, has committed a $17 million mezzanine funding towards the construction of a new $214 million corn ethanol producing plant in Hungary.

Demand for renewable fuels in Europe is increasing as a result of the EU’s Renewable Energy Directive, which requires that by 2020 at least 10% of energy used in transport must come from renewable sources. Global production capacity currently lags significantly behind projected demand for biofuels.

The new plant, Pannonia Ethanol, is expected to double Hungary’s current ethanol output level. Construction is already underway and should be completed in early 2012, when it will have a production capacity of up to 240,000,000 liters of fuel grade ethanol per year.

Pannonia Ethanol will deliver substantial benefits to Hungary’s economy. Located in Dunaföldvár, a low income agricultural region in central Hungary, the plant will create at least 77 jobs directly and many more indirectly.  Processing approximately 575,000 tons of corn per year, the plant is also expected to provide an important alternative market for Hungarian corn, supporting the local farming industry in the wake of the recent withdrawal of EU subsidies for Hungarian agriculture.

The plant will also manufacture DDGS (Dried Distillers Grains with Solubles), a co-product of ethanol and a natural high protein animal feed. Europe currently has an undersupply of high grade DDGS, so the project will offer a much needed steady supply of uniform quality GMO-free DDGS to the European market.

David Creighton, President and CEO of Cordiant Capital, says: “Demand for ethanol in Europe is booming and the trend is expected to continue in the long term. The project will respond to this surge in demand by substantially boosting Hungary’s ethanol production, making it an important supplier for the European market.”

“Ethanol produced from this plant will have a competitive advantage both in terms of costs and greenhouse gas emissions because it will use locally grown corn. Transport costs and emissions will be greatly reduced.”

Cordiant explains that Pannonia Ethanol will use state-of-the-art technology and processes far superior to any currently existing in ethanol production in Hungary. 40% of the electricity used in production will be self-generated. 

This means that Pannonia’s ethanol will significantly exceed the requirements of the EU Renewable Energy Directive, which requires renewable fuels to achieve a 35% greenhouse gas emission reduction in comparison with fossil fuels. In 2017, this threshold increases to 50%. By comparison, Pannonia’s ethanol will achieve greenhouse gas savings of at least 57% from day one of operation.

Senior lenders to the project are the Overseas Private Investment Corporation (OPIC) and the Export-Import Bank of the United States (Ex-Im Bank).


About Cordiant Capital

Founded in 1999, Cordiant pioneered the creation of emerging market corporate loan funds that invest in partnership with International Financial Institutions. Cordiant has managed over $2.2 billion in subscriptions from some of the world’s largest institutional investors in three emerging market loan funds; the ICF Debt Pool; and one private equity fund, the Canada Investment Fund for Africa. The firm has made investments in nearly 200 companies in more than 50 countries. It has exposure to all major sectors, including a large number of infrastructure investments. Cordiant is a signatory to the UN Principles for Responsible Investment.

Press contacts

David Creighton,
President and CEO
Cordiant Capital
Tel: + 1 514 286 1142

Nick Mattison or Fay Israsena
Mattison Public Relations
Tel: +44 (0) 20 7645 3636