Virgin Group Pledges to Invest $400 M in Renewable Energy

The Virgin Group’s global empire — which includes airplanes, music, cell phones, limousines, and most recently space tourism — officially expanded into the renewable energy market this month with its new company, Virgin Fuels. The company has pledged to invest up to $400 million dollars in renewable energy initiatives over the next three years, starting with an investment in the California-based startup company, Cilion, Inc.

Formed in June 2006, Cilion plans to build and operate ethanol plants that will be cheaper and greener than standard corn-to-ethanol plants, reducing the need for fossil fuels in ethanol production. The company plans to build seven plants by 2009, three of which will be based in California, with a total of 440 million gallons per year capacity. Virgin Fuels led the current investment in Cilion, which has now raised over $200 million in two financing rounds. The current round includes the Yucaipa Companies and the founding investors, including Khosla Ventures — a leading venture capital firm, and Western Milling — one of the largest grain handling and processing groups in the U.S. and the largest on the West Coast. When fully operational, ethanol produced by Cilion is expected to be price competitive per mile driven with gasoline even if oil prices drop to $40 per barrel, assuming normal gasoline distribution margins. “This is a very exciting investment for Virgin and the new company will make a substantial contribution to meeting Governor Schwarzenegger’s goal as stated in his recent Executive Order, calling for California to produce a minimum of 20% of its own biofuels by 2010,”said Sir Richard Branson, founder of Virgin and the Virgin Group. Virgin Fuels’ first investment supports Branson’s and the Virgin Group’s belief that all businesses, especially those involved in transportation, must be at the forefront of developing environmentally friendly business strategies with a focus on replacing traditional energy with energy coming from renewable sources. “We do not intend to limit ourselves to US biofuels as we believe that transportation companies have a responsibility to lead and fund research and development of new bio-fuels that can be produced, distributed and used with greater positive environmental impact than the current technologies used in the production of bio-fuels,” said Branson. “This is only the beginning of our investment program which begins in the US and will expand to the UK, mainland Europe and other parts of the world.” Western Milling’s President Kevin Kruse and Khosla Ventures’ Founder, Vinod Khosla welcomed the investment and said they are looking forward to working closely with Branson and the Virgin Fuels team commenting, “The Virgin Group has a world-wide reputation for innovation and reaching out to consumers, and their skills and experience will play a key part in Cilion’s success.”

No posts to display