VCs back TMO for £15m

08/05/07 15:33

Ethanol producer TMO Renewables has received £15m of funding from a consortium of institutional backers.

The company has developed a patented process of converting biomass into ethanol which is being touted in some quarters, particularly in the US, as the next major fuel.

The US is set to become the world’s biggest producer in the next few years although the European Union is also actively encouraging its development through tax breaks and subsidies.

TMO’s technology can also be used as a method of altering producing other renewable fuels such as biodiesel and bio-butanol although it is focusing on ethanol.

The company is being backed in this funding round by Aegon Asset Management, Charles Stanley, City Capital, Ethanol Investments plc, Greater Europe Deep Value Fund, Liberty Square Asset Management, Nikko Principle Investments, Orn Capital Limited and St Peter’s Port Capital.

Existing shareholders including Artemis, Fidelity, First State, Jupiter and RAB Capital are also remaining with the company.

Hamish Curran, chief executive officer of TMO, said: “TMO’s technology has previously been funded by over £5.9m in equity and £0.85m in grants through the Carbon Trust, the UK Department of Trade and Industry and the European Union.

“We believe that TMO is a truly distinctive business which will enhance the rate of development of the fuel-for-ethanol market, at the same time providing significant cost advantages and a much reduced carbon footprint when compared to existing starch-based technologies.

“Having successfully raised these substantial funds, we look forward to commissioning the process demonstration unit and scaling up the business to the next stage.”