Darby Overseas Investments, the private equity arm of Franklin Templeton Investments, has committed a €16.4 million mezzanine loan to Zaklady Tluszczowe Bodaczow (ZTB), the fifth-largest producer of vegetable oils and edible fats in Poland.
Until recently, the firm focused on the market for consumer food products, but it is now also serving the growing bio-diesel industry. The loan from Darby will help ZTB finance a new high capacity production line for rapeseed oil, in the process making it a key supplier to producers of rapeseed methyl esters, the primary additive to diesel fuel.
In a statement, Darby senior managing director Robert Graffham said: “The company is very well placed to capitalise on the increasing market demand for rapeseed oil arising from the EU directive promoting the use of bio-fuels.”
The directive referred to by Graffham set targets for member states to increase the use of bio-fuels in relation to petroleum-based fuels. Despite some disagreement surrounding the environmental advantages of bio-diesel, it is generally considered less polluting than petroleum.
Following the investment in ZTB, the Darby Converging Europe Mezzanine Fund has invested €102 million of its €248 million total capital. Formed in 1984, Darby started investing in Latin America and then Asia before more recently turning its attention to Central and Eastern Europe.