$35 Billion to Renewable Energy Projects in Peru

Peru's Ministry of Energy announced on February 7 that it will present a portfolio of 35 renewable energy projects at the Energy Work Group of the Asia Pacific Economic Cooperation Forum taking place during March in Iquitos.

"What we want with this portfolio is send a clear message: Peru is doing everything to diversify its energy model, taking advantage of the many kinds of energy that we have," stated the Peruvian deputy minister of energy, Pedro Gamio.

One of the projects in the portfolio is for a hydropower plant to be located in the Amazon, with the potential to generate over 7,500 megawatts per year, even though Peru uses just 350 megawatts per year. Peru would become a major exporter of power.

The price tag of all 35 projects? $35 billion.

Also, on February 1, the Peruvian congress was presented with a proposed law on renewable energy that is intended to fund research and encourage development by public and private companies.

Just this Monday, February 18, Peru's Ministry of Energy signed an agreement with the German Institute for Energy and Environment to develop a framework to promote technology transfer in the area of renewable energy and biofuel sources.

Although the dreams may be scaled back when reality sets in, it seems likely that at least some money will be tossed towards Peruvian renewable energy and biofuel companies. Let's take a look at a couple of biofuel companies...



Stratos Renewables (OTCBB: SRNW)

Stratos Renewables, based in Lima, Peru, is eyeing the "hot" emerging industry for sugarcane ethanol. In December, Stratos' advisory board was joined by the former chairman of the Climate Change Task Force from the time of the Clinton administration. Well, maybe I should call that the "Gore administration," since Gore is the one who received the Nobel Peace Prize for his work on climate change awareness. Stratos Renewables is still in its developmental stage, having just recently taken over the shell of another company, so it's hard to know what to expect. The stock has been trading for less than three months.

Pure Biofuels (OTCBB: PBOF)

Pure Biofuels acquired the largest biodiesel plant in Peru in December, and expects to have commenced production on a second, much larger, biodiesel plant near Lima, Peru in the first quarter of 2008. This second plant will utilize palm oil for the feedstock.

Some negative press has hit palm-based biodiesel recently. For example, the TimesOnline quoted Roland Clift, professor of environmental technology at Surrey University in the U.K., as saying: “Biodiesel is a complete scam because in the tropics the growing demand is causing forests to be burnt to make way for palm oil and similar crops."

The stock of Pure Biofuels has had a rough ride. A year ago, it was up at $1.40 per share, but today is trading at 36 cents a share, so it has lost 74% of its value in that time. In the last three months, it has dropped 28%, from 50 cents to 36 cents a share.

In conclusion, Peru is making noises about throwing money at public and private companies in the renewable energy sector. Do a little research, and you may find a stock that will benefit. Note that 15 of the 35 projects in the proposed portfolio will be for hydropower, so that is one promising area to look.