Manila (15 December) -- President Gloria Macapagal-Arroyo has welcomed the plan of a Spain-based energy company to invest $250 million to develop 50,000 hectares of cassava plantation in the Philippines for the production of feedstock for biofuel facilities in the country.

"This proposed investment can boost our long term-goal in biofuel production and the development of alternative fuel sources in these days of rising fuel costs," she said.

Last January, the President signed into law Republic Act (RA) 9367 or the Biofuels Law, which aims to ease the country's dependence on imported, dollar-draining and pollution-generating energy sources by making the blending of ethanol and coco biodiesel in petroleum products mandatory.

The Department of Agriculture (DA) said that Abengoa Bionergy operates bioethanol facilities not only in Europe but also in Brazil and the United States.

Abengoa Bionergy expects its planned distillery here to produce one million to 1.2 million tons of feedstock, and generate about 150 to 200 million liters of bioethanol annually.

Under a Memorandum of Understanding (MOU) signed with the Philippine Agricultural Development and Commercial Corporation (PADCC), Abengoa Bioenergy will assist the DA in identifying varieties of cassava for trial cultivation.

The agreement is valid for one year.

The MOA was signed by DA Undersecretary Bernadette Romulo Puyat and Javier Salgado Leirado, chairman of Abengoa, during the two-day state visit of President Arroyo to Spain.

Puyat said that aside from providing the design engineering and the machinery required for the development of cassava plantations, Abengoa will also study the possibility of establishing bioethanol production plants in the Philippines.

Through the Abengoa-PADCC Working Committee, the PADCC will be tasked to assist the Spanish company in conducting capability enhancement training for farmers, particularly in the area of enterprise management, she said.

Puyat said that Abengoa will also lend its technical expertise in agriculture in developing high yielding varieties and increasing feedstock productivity.

Agriculture Secretary Arthur Yap said the "Department of Agriculture recognizes the success of Abengoa in developing itself as the largest ethanol producer in Europe and the fifth in the United States."

"We deeply appreciate the plan of Abengoa to assist in the overall development of the bioethanol industry in the Philippines with the objective of producing ethanol at competitive prices and at the same time expanding the domestic market for ethanol gasoline," he said.

Yap said that Abengoa and PADCC, along with the DA Biofuel Feedstock Development Program, can enter into partnerships focusing on energy crops development and cost-competitive biomass technology.

"We hope that Abengoa will immediately move forward its initial understanding with PADCC into concrete timelines to cover the early completion of the feasibility study and the immediate implementation of the project, preferably within 2008," he added.