NDF - Financing for climate change and development projects

Using rice bran oil for biofuel

Photo: Aage Jørgensen
Photo: Aage Jørgensen
Photo: Latinoil
Photo: Aage Jørgensen
Ole Gregersen and Andreas Eriksen, owners of Latin Oil S.A.

IDEAS winner starts production of rice bran oil

The production of a new type of plant-based oil has started in Tipitapa, a small city just outside Managua, the capital of Nicaragua. The oil is produced from rice bran which is extracted from the hard outer brown layer of rice after removing the rice husk. The production takes place in a new processing plant with capacity to process twenty tons of rice bran, producing 5,500 kg rice bran oil every day. Nicaragua produces more than 300,000 MT of rice annually and the rice bran is mainly used for animal fodder or simply discarded. Rice bran oil can be used as biofuel to replace fossil-based fuel in combustion engines leading to reduction in greenhouse gas emissions. The by-products of the rice bran oil production are defatted rice semolina and paraffin which both have commercial uses so that the production has no waste at all. Furthermore, rice bran oil has health and nutrition benefits.

Rice bran oil is new to Central America and the company behind the production got started when they won the IDEAS contest in 2013. The Energy Innovation Contest (IDEAS) is an initiative to support the development of innovative projects that promote renewable energy, energy efficiency, biofuels and energy access in rural areas. IDEAS is managed by the Inter-American Development Bank (IDB) and invites organisations in Latin America and the Caribbean to submit their project proposals related to renewable energy and energy efficiency. The IDEAS 2013 was co-financed by the Nordic Development Fund (NDF).

Latin Oil S.A. entered a winning proposal for the Rice Bran Oil for Biofuel in Nicaragua in IDEAS 2013. The IDB grant agreement for USD 100,000 was signed in 2014. Together with the IDEAS grant, Latin Oil S.A. has been able to source additional funding from private investors which has been invested in setting up the brand new processing plant.

Rice bran oil has a variety of uses and apart from biofuel it is also an edible oil well-suited for cooking. It is notable for its high smoke point of 232 °C (450 °F) and its mild flavour, making it suitable for high-temperature cooking methods such as stir frying and deep frying. In Asia, in countries such as China, India and Japan, rice bran oil is widely used for cooking and other purposes, but this type of oil and its benefits are little known in Central America. The IDEAS project in Nicaragua will change this situation and introduce high-quality rice bran oil to the Central American market and at the same time generate significant climate and development benefits.

More information
IDEAS – Energy Innovation Contest [NDF C58]
IDB IDEAS IV 2013 Contest
Latin Oil S.A. Nicaragua