British multinational oil and gas company BP and US agribusiness giant Bunge completed the formation of their joint venture on 2 December that combines their bioenergy and sugarcane ethanol businesses in Brazil.

BP Bunge Bioenergia had 11 biofuels sites in five Brazilian states, with more than 10,000 employees. It had a total crushing capacity of 32M tonnes/year of sugarcane, capable of producing more than 1.5bn litres of ethanol and 1.1M tonnes of sugar, BP said.

“Brazil is one of the world’s largest and fastest growing biofuel markets and, through this transaction, BP Bunge Bioenergia is now the second largest operator by effective crushing capacity in the Brazilian bioethanol market,” BP said.

BP and Bunge’s agreement to form the joint venture was announced in July 2019.

As part of the transaction, Bunge received cash proceeds of US$775M, comprising of US$700M of non-recourse Bunge debt that was assumed by the joint venture at closing, and US$75M from BP, before customary closing adjustments. The proceeds were used to reduce outstanding indebtedness under the company's credit facilities, Bunge wrote.