Project to construct and operate a 145,000 t/y
Fuel Ethanol Facility in Hungary

 Introduc>on
 Markets
 EU Biofuel Policy
 Bioethanol Markets
 Co‐Product Markets
 Project
 Loca>on
 Technology & Construc>on
 Sustainability
 Financials
 Risk Management
 Funding
 Conclusion

Who is Ethanol Europe?
 Ethanol Europe LLC is an Irish registered holding company.
 Ethanol Europe’s purpose is to develop, own and operate
Fuel Ethanol facili>es throughout Europe.
 Ethanol Europe is wholly owned by Irish businessman,
Mark Turley and his family.
 The Turley family has substan>al business and commercial
interests throughout Ireland, the UK and Eastern Europe.

Ethanol Europe Intends to…
 Build a 181 Million liter (145kt) per year Fuel Ethanol plant
located just north of the town of Dunaföldvár at a cost of ca.
€115 million.
 Process ca. 450,000 metric tons of corn annually.
 Produce ca. 150,000 tons of high protein animal feed, as a co
product.

Ethanol Europe has…
 Selected the town of Dunaföldvár as the project loca>on aer
extensive due diligence ac>vi>es on 8 sites in 3 countries.
 Iden>fied a local Hungarian Partner, Cargill ‐ Hungary, for
feedstock supply.
 Entered nego>a>on to purchase ca. 15ha of land adjacent to the
Cargill facility.
 Entered nego>a>on for use of the private port facili>es at the
site.
 Engaged a local office of an interna>onal engineering firm to
begin the permiang process
 Opened a Budapest office and ini>ated the incorpora>on of a
local subsidiary company

Markets

EU Biofuels Policy
 Renewables Energy Direc>ve RES‐D
 Beginning at the latest 31.12.2010 each member state must ensure that 10% of transport fuels be
from renewable sources by 2020
 Bio‐fuels must meet strict sustainability and Greenhouse Gas Reduc>on standards
 Ini>ally fuels must provide a 35% reduc>on in GHG’s compared to petrol.
 From 2017 GHG savings requirement will rise to 50% (Corn ethanol has typically 56% saving)
 The feedstock produc>on must be environmentally & socially sustainable
 Fuel Quality Direc>ve FQD
 New EU regula>ons for fuel blends containing up to 10% biofuels v/v
 Requires a 10% reduc>on in the carbon emiked by burning fuels by 2020
 Enshrines biofuels as a major contributor to emissions reduc>on
 EU Trade Policy
 EU imposes a tariff of €192/t on imported fuel ethanol
 Creates a price floor of ca. €0.50/l for ethanol
 Significant change unlikely due to Doha WTO collapse
 Exis>ng producers lobby is strong in Brussels

EU Petrol Consump>on & Ethanol’s Share
Millions of Tons
Source: Tereos S.A.

EU Ethanol consump>on rises to 17 billion litres by 2020
Billion litres
Source: Tereos S.A.

The Ethanol Market
 Under the EU Renewables Direc>ve each Member State
will be obliged to source a por>on of its transport fuels
from renewable sources
 The target for 2010 is 5.75% rising to 10% in 2020
 Currently in EU, ethanol is principally used to
produce ETBE an octane enhancer
• The EU market for Bioethanol will therefore grow at a
rate of 1.25 billion litres per year for at least 10 years
• EU based producers are protected from foreign
compe>>on by a €192/t levy on imports.

US, Brazil and EU Ethanol Prices
€/m³
US Brazil EU
Source: Agra Informa

EU Ethanol Trades above Petrol
Average
Price
Differen.al
Source: Imperial College London

Ethanol Price Vola>lity
 As seen above, ethanol price vola>lity in the EU has been low compared to
other major markets. This situa>on is not expected to change significantly
 The EU ethanol price is driven by the cost of imported Brazilian ethanol FOB
T2 Rokerdam, so indirectly depends on the price of sugar in Brazil
 Growth in Brazilian supply to EU limited by:
 Physical constraints on expansion of cane crop
 Physical constraints on building new plant
 Strong mandated internal consump>on >25%
 Strong demand from other markets like US, Japan & China
 Limits on available shipping capacity

Corn Price Vola>lity
 Hungarian corn exhibits greater total vola>lity, peak to trough, than Ma>f
due to landlocked geography.
 Internal consump>on represents <50% of the
average crop
 Serious lack of storage as market is export driven.
Cargill have 650kt including 50kt at our site
 As seen above, Hungary is the lowest cost corn
producer in Europe so even if overall price levels
rise, the compe>>ve advantage should remain
 OECD & FAO predict corn prices to 2016 easing to
$140/t. Our model uses €130

Co‐Product Markets
 The principal Co—Product is Dis>ller’s Grains with Solubles
which is sold as animal feed in dry form (DDGS) and wet
form (WDGS)
 Leading DDGS marketers are commiked to purchase all our
DDGS
• The second co‐product is CO2 which can be cleaned
and processed for a variety of industrial agricultural
and cooling purposes
• We are currently seeking a third party to purchase our
CO2

DDGS Pricing
Source: CME / CBOT

The Project

How will the Plant Look?
Granite Falls Energy, 181 Million Litre Ethanol Plant in Granite Falls, Minnesota, USA

The Dunaföldvár Site
M6 5km
Budapest 100km
Lukoil Fuel
Terminal
Proposed
Site
15 ha
Agrograin
Storage
Facility
Ethanol
Loading
Je<y
Maize/DDGS
Loading/Unloading
Proposed Project Loca>on showing available infrastructure

Loca>on & Target Markets
Dunaföldvár
Major Oil refineries / terminals in rela>on to the Danube/Rhine/Main Waterway

Hungary is a Low Cost Corn Producer
Source: United Na>ons Food and Agriculture Organiza>on

The Budapest Market is cheaper than Euronext Paris
Source: Budapest Commodity Exchange and Euronext

Hungarian Corn exceeds
the weight requirements
USDA #2
Target Weight
Acceptance
Cut off
Source: SGS Hungaria K.

Result is significant ethanol
yield improvement
Cumula.ve Distribu.on
120.00%
4.5%
100.00%
80.00%
Sample Average
72.6 kg/hl
60.00%
95% of Samples
Above Target Weight
40.00%
Only 1% of Samples
Below rejec>on level
20.00%
0.00%
58.0
59.0
60.0
61.0
62.0
63.0
64.0
65.0
66.0
67.0
68.0
69.0
70.0
71.0
72.0
73.0
74.0
75.0
76.0
77.0
78.0
79.0
80.0
81.0
82.0
83.0
84.0
Source: SGS Hungaria K.

Plant loca>on in area of highest regional aid

Technology
 Ethanol Europe has an agreement with ICM, Inc. for the use
of their corn ethanol process technology
 More than two thirds of all US ethanol plants use ICM
technology
 Provides the project with ICM proprietary Dryers and
Methanators
 ICM Technology provides:
 Zero Effluent Discharge
 Highest Plant Air Quality
 Best Sustainability & Greenhouse Gas Reduc>on Performance
 Highest Ethanol Yield in the industry
 Lowest Energy Consump>on in the industry
 ICM has collaborated with the design & build contractor, Fagen, on
over 80 ethanol projects

Design & Build Contractor
 Ethanol Europe has an agreement with Fagen, Inc. to
design and build the facility in Dunaföldvár
 Fagen will provide an EPC wrap price for banking and
contractual purposes
 However, actual project cost will be cost +15% capped at
the EPC price
 Fagen is the largest EPC contractor of ethanol plants in
the world with 2007 revenue of ~ $2 billion.
 Fagen had a bonding facility in excess of $1 billion
 Fagen will take a 50% equity stake in the project

Proposed Plant Layout
Preliminary Engineering works showing Building & Equipment Layouts, Grain Storage & River Port

Permiang and Construc>on
 Environmental
 30th of July 2009 – Submission for ini>al phase
 1st of December 2009 – Submission for 2nd phase
 SEVESO
 30th of July 2009 – Submission for phase 1
 1st of December 2009 – Submission for phase 2
 1sy of May 2010 – Submission for phase 3
 Building Permit
 30th of September 2009 – Submission
 All permits scheduled to be issued prior to April 30th 2010
 Construc>on start – April 2010
 Construc>on comple>on – December 2011

Future Produc>on Upside
 The plant is guaranteed to produce at an annual rate of 180
million litres but can securely give 15% more throughput.
 Therefore, immediately aer Handover plant can produce at
a rate of 206 million litres.
 A deboklenecking investment of ca. €5 million can take
produc>on to over 250 million litres within 9 months.
 If sufficient feedstock is available, produc>on can be doubled
to over 500 million litres at ca. 65% of original capex.

Sustainability & GHG’s
 Plant will be required to meet a GHG reduc>on value of 35 upon opening.
 EU has assigned typical GHG saving for corn ethanol is 56%
 In 2017 the GHG savings required will grow to 50%
 Using modern gasifica>on technology a Solu>on has been iden>fied to
replace and/or supplement the natural gas supply
 Plantwide GHG savings will be of the order of >70%
 Project costs are modest i.e. <€10 million
 Feedstock could be MSW/RDF so possibility of addi>onal revenue stream

Possible Future Projects
 If viable industrial scale cellulosic ethanol is available, this can be built in
parallel to the exis>ng grain handling & brewing sec>on.
 If viable Algae based ethanol/biodiesel technology becomes available our
excess CO₂ can be supplied as feed gas to an on site algae farm and fuel
recovery plant.
 Depending on future commodity price projec>ons a plant can be built to
“frac>onate” the grain prior to the ethanol process to provide:
 Corn oil
 Corn germ
 Corn bran
 Dietary fibre

Funding
 Norkap Bank AG, Zürich, was formerly ABB Export Bank AG
 Sold to private investors in 2003, specialize in industrial & infrastructure
project finance
 Extensive experience and exper>se in finance of Fagen/ICM corn ethanol
project and reacted posi>vely to our business plan especially Cargill aspects
 First mee>ng Feb ‘08 with ongoing follow up
 Nordkap is leading and organizing debt syndicate

Funding
 Introduc>on to vice president in Paris November ‘08
 Follow up mee>ng with Kevin Knightly, MD Rabobank Ireland
 We are currently awai>ng NDA’s to begin formal discussions
 Rabobank also has extensive prior experience in ethanol and renewable
energy finance.

Conclusion

Current Project Status
 Heads of Terms Agreed on....
 Land Acquisi>on contract
 Maize Supply contract
 Animal Feed Off Take contract
 Nego>a>ons Ongoing on ....
 EPC Construc>on Contract
 Project Finance condi>ons
 Government support including support of Hungarian Dev Bank
 Nego>a>ons Yet to Commence on ....
 Ethanol Off Take contracts

Ownership Structure
 Ethanol Europe has commiked 50% of the required equity
 The EPC contract partner, Fagen Inc. has expressed a strong
desire to take a 50 % equity stake
 Ethanol Europe is open for an interested Equity Partner to enter
the project on an equal foo>ng with the current Promoter and
EPC contract Partner at a level up to 33%. Ideally, that partner
would bring strategic value in addi>on to equity