Jaunpagasts Plus Ltd.'s Chairman Dainis Peimanis was shot dead on his way to work in Riga some months after convincing the Latvian Parliament that there's a need for a bioethanol plant in Latvia, and that the state should stand as the guarantor of a big loan for the distillery. The state guarantee was not extended though, since politicians lost faith in the project following Peimanis' death.
The State Treasury's Director of Foreign Financial Resources Inguna Kupca said the ministry cannot vouch for a state guarantee for Jaunpagasts Plus Ltd. until it has been approved by a vote in the Parliament.
"The state approved to stand as the guarantor of a loan of 8.93 million lats ($14.52 million) for the company last year," Kupca said. "This decision was for last year's budget, and since the project was not finished last year, a new decision has to be made this year."
Finance Minister Gundars Berzins has said that before signing the state's guarantee for the plant's construction, the project must first be carefully assessed, but work on the project will not stop and the plant could get the state guarantee this spring, following respective amendments in this year's budget. Lolita Pankova, project manager for Jaunpagasts Plus Ltd., said she thinks the state will prolong their promise from last year, and stressed the importance of providing jobs in the agricultural sector in Latvia.
"If we got the state guarantee, then we could be ready to start producing biofuel in the autumn of 2002," Pankova said. "The capacity will be around 40 million liters per year."
Bioethanol is made from starch plants such as corn or sugar beets and cellulose plants, which fuel arguments that Jaunpagasts Plus Ltd. will provide jobs in the countryside. The technology is in its preliminary stages. There are several benefits to using bioethanol - it's made from renewable resources and offers less dependency on crude oil. Pankova said several companies have showed an interest in building the first ever biofuel plant in Latvia.
"The construction will probably be carried out by a local company, but the technology will come from abroad since this is a very new thing," she said.
Biofuel has already been added to gasoline in the United States and Canada for some years, but it's just becoming popular in Europe.
"We have a principal agreement with gasoline producers here who blend fuel," Pankova said. "If we can reach a formal agreement, they will take our entire production."