Carlyle & Riverstone back UK’s first bioethanol plant

The Carlyle Group and Riverstone Holdings have teamed up to back The Ensus Group, which is planning to build the UK’s first bioethanol plant.

US buyout firm The Carlyle Group has again joined forces with Riverstone Holdings, its normal partner for energy investments, to back a biofuels group trying to establish itself as a Europe-leading bioethanol producer.

Ensus CEO Alwyn Hughes

The Ensus Group, which will supply bioethanol to the European transport fuels industry, plans to build a number of sites across Europe, starting with the UK. Its first facility will be the Wilton International site in North East England, with construction due to start in the next few months. By the time the site is fully operational in 2009, it expects to employ about 100 people and produce more than 400 million litres of bioethanol per year.

Ensus boasts an illustrious management team. Chief executive Alwyn Hughes is an ex-ICI industry veteran, while the board is chaired by Sir Rob Margetts, the former ICI chairman who now chairs Legal & General. Ensus founder Michael Fox will remain as deputy chairman and director of business development.

Ensus is hoping to benefit from the growing demand for biofuels, as governments across Europe look to increase the proportion of energy that comes from renewable sources.

Last week the European Union said biofuels must account for at least 10 percent of all transport fuels used in member states by 2020.  Next year the UK Government is set to introduce the Renewable Transport Fuels Obligation, which will target a 5 percent share for biofuels in the UK market by 2010. Operating at full capacity, the Ensus plant will be able to supply about one third of this amount.

Robert Easton, managing director of Carlyle, said: “The market fundamentals are incredibly positive and we anticipate substantial growth in bioethanol demand both in the UK and across Europe. This first facility provides the ideal platform from which to establish our position and we are already actively exploring opportunities for further facilities both in the UK and abroad.”

Financial details of the deal were not disclosed, but the two buyout firms are thought to have made the investment through Carlyle/Riverstone Renewable Energy Infrastructure Fund I, their jointly-managed renewables fund.