Clean Energy Brazil plc, the newly-listed investment vehicle for Brazilian biofuels has just acquired an indirect minority stake of 49% in Usaciga Acucar Alcool e Energia Electrica SA for a consideration of BRL267.86 million (US$130 million).

Clean Energy Brazil's philosphy is to invest in integrated sugar and bioethanol production units in Brazil thereby creating exposure to Brazil’s domestic bioethanol market, the global sugar market and future growth in global bioethanol demand.

My view is that in principle, it's a great idea to set up a fund that goes into Brazil to buy up ethanol production for exposure to its investors back home. It's just that looked at in a distanced and sceptical way, could one be entirely convinced that they are going to;

a) do a better job than the Brazilians at their own industry ?
b) not pay over the odds for acquiring their ethanol assets when the oil price is high ?

Of the 6 strong CEB team only two appear to be Brazilian - so some awkward analysts might wonder if any of the other 4 speak any Portuguese?

I don't doubt that ethanol seems set to boom for at least the next 10 years in Brazil. The real test for biofuel producers may only come when the price of oil comes down - not a complete impossibility if the Middle East stabilizes and alternative energy technologies mature to mass market. And don't think it won't happen fast, especially if the price is right. Compared to two years ago, the Toyota Prius is already looking old-fashioned to what's coming through now. Just look at this crazy vehicle here - the Minicat which runs on compressed air. With 3 times the range of electric lithium ion battery vehicles and rechargeable in a mere 3 minutes, this is a very, very radical departure - if it takes off. Admittedly, most Americans wouldn't be seen dead in a dinky looking vehicle but many Europeans and Asians view these looks as a plus.