How do you make a $1.5 billion oil palm plantation? From a seed to a million-dollar company
A $1 billion oil-and-gas palm plantation in Brazil could become a $25 billion company in a matter of years, as the project is getting off to a rocky start.
The project, which aims to be the world’s biggest oil palm project, was conceived in 2009 as a way to reduce carbon emissions and reduce water and soil contamination from palm plantations.
The project has also attracted a lot of attention from environmentalists.
But it is a long way from being ready for prime time.
The plantings will take up to five years to grow, and the company has been struggling to raise capital, said Daniel Rodrigues, an analyst with Bloomberg Intelligence.
The company had planned to build a palm-oil production plant in Brazil, but environmental experts and the government of President Dilma Rousseff have warned that the project could be a disaster.
It has also been plagued by corruption allegations.
“It is a project that has been stalled for years and we’re not going to be able to start building until the legal process is over,” Rodrigues said.
“This is going to get even more complicated.”
The Brazilian government is also fighting a legal battle against the company over the project’s financing.
The government is asking a judge in Sao Paulo to block the project, saying the project will not create jobs or protect the environment.
It also wants the company to pay back money it has already received from Brazil and China, where it is based.
“We need to make sure that the government is not going down the path of putting all of its eggs in one basket,” Rodrigue said.
In a letter to the judge, Brazil’s Environment Ministry said the project has been “dramatically delayed” by legal challenges.
It cited concerns about corruption, water pollution and lack of transparency in the company’s financing plans.
“While it has been shown that the company is not currently in compliance with the terms of the project financing agreement, it is still unclear how it will comply with the environmental regulations that will be imposed by the court,” the ministry wrote in a letter seen by Reuters.
“It is necessary to delay the project indefinitely in order to ensure that this project is not jeopardized.”
The government says the project needs to raise $1bn in private capital to begin operations.
But Rodrigues told Reuters that the $1b was a “very optimistic” estimate and it was unlikely to happen.
The company has also not been able to raise more money from investors in Brazil.
The Brazilian economy is in a recession, and Rousseff’s approval rating has dropped to about 35 percent.