China New Energy climbs on Zimbabwe bioethanol deal

16th Oct 2015 09:53

(ShareCast News) - Shares in China New Energy Limited (CNE) were sent soaring on Friday by news that it is poised to join a 120m-litre cassava-to-bioethanol plant in Zimbabwe with its regional partner Sunbird Bioenergy.Sunbird, CNE's sub-Sahara-focused biofuel partner, has signed an agreement with the Republic of Zimbabwe to develop the bioethanol plant in the country's Machonaland Central Province.AIM-listed CNE put out an annoncement to clarify that, while it had been erroneously reported in the media that it was also part of this agreement, it was "expected that CNE will enter into [a memorandum of understanding] with Sunbird shortly".CNE, which floated in London in May 2011, said it will take responsibility for designing the plant and supplying the key fermentation, distillation and dehydration technology as well as providing commissioning and ongoing support and maintenance services."The bioethanol plant will be designed using the company's proprietary cassava to ethanol technology that has been successfully commissioned, and is now fully operations, in Thailand," it added.Sunbird and CNE plan to complete the project design by February next year and expect financial closure for the project in the first quarter of Q1 2016, with the project being commissioned in late 2017.CNE's executive chairman Yu Weijun said: "Whilst this project is at an early stage in the development cycle, it is an important milestone that demonstrates that we continue to make progress in the African market."Richard Bennett, a CNE director, is also a director of Sunbird, which will make a binding agreement an AIM related party transaction.Shares in the company were up 119% to 1.59p at 1005 on Friday.