Brazil plans $38 bln sweetener to revive ethanol sector

Reuters
Fri Feb 24, 2012 3:54pm EST
By Peter Murphy and Reese Ewing

* Govt wants ethanol to account for 50-55 pct gasoline mkt
* Govt to direct funds to sector through 2015
* Financing intended to stimulate private sector investment
* Experts say fundamental problems for sector remain

SAO PAULO, Feb 24 (Reuters) - Brazil's government announced an aggressive plan on Friday to raise flagging ethanol output over the next four years by showering the sector with 65 billion reais ($38 billion) in subsidized credit.

The government will allocate funds via banks to mills and independent growers for the expansion and replanting of older cane whose yields have fallen. Credit will also be available to build up ethanol stockpiles.

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