BIO’s investment in Maple Etanol SRL

On the 27th September 2021, Oxfam Belgium published the report ″Fuelling human rights violations″ addressing the problematic consequences of a bioethanol project co-financed by BIO.

BIO values Belgian NGOs and their local partners conducting important work on socially relevant topics. Oxfam’s criticism notably concerns the company Maple Etanol SRL (Maple), a greenfield bioethanol project from sugarcane to the value of 245 million USD.

It concerns a large sugarcane plantation and a factory to produce ethanol for export, mainly to Europe, as biofuel. The Peruvian government granted a concession of 10,700 hectares to Maple Etanol, financed through loans and grants from different sources including, in 2010, a loan from BIO for 6.5 million EUR (4% of the total costs). The investment was in line with the European Policy and the project was eligible for carbon credits under the Clean Development Mechanism of the United Nations Framework Convention on Climate Change.

In 2013, Maple Etanol prematurely reimbursed BIO and left our portfolio. Since then BIO no longer had access to the monitoring reports either.

When the market prices for ethanol collapsed in 2014, Maple Etanol experienced financial problems. The company went bankrupt in 2015 and was consequently sold to AgroAurora, a branch of Grupo Gloria, Peru’s biggest conglomerate of sugarcane investments. Oxfam’s testimonies on the excesses concerning environment and health are mostly dated after 2015, the year when Maple went bankrupt and was bought by Grupo Gloria.

It is important to paint a picture of the social context when the decision to invest was made. In 2010, Peru was a priority country for the DGD and the development of biofuel was a worldwide political priority. At the time, the EU and its member states even obliged oil companies to mix at least 5% biofuel in their petrol.

Since then, awareness that biofuels are not the solution to reach our climate goals has emerged worldwide and at BIO as well, and more attention has been given to the loss of biodiversity, deforestation and the violation of human rights brought on by these largescale biofuel projects.

That’s why, since 2014, BIO’s Investment Strategy formally excludes investments in biofuels in developing countries. Furthermore, in the current context of for instance Fit for 55% and the Carbon Border Adjustment Mechanism, BIO would not be able to accept this kind of loan application.