Mumbai: Mcleod Russel India Ltd plans to invest up to Rs50 crore in the next two years in D1 Williamson Magor Bio Fuel Ltd, a joint venture company promoted by D1 Oils of the UK and Williamson Magor & Co. Ltd for production of bio-diesel in the east and north-east parts of India.

D1 Williamson Magor Bio-fuel Ltd has been promoting jatropha plantation farmers on their privately owned waste land under contract farming arrangements for use of jatropha oil seeds for manufacture of bio diesel.

The company has undertaken plantation on about 8,000 hectares of land during 2006 and plans to undertake 50,000 hectares each year from 2007 onwards. The plantation has already been completed on 29,000 hectares during 2007. The company plans to undertake plantation of total 200,000 hectors by 2011-12.

The investment by the company involves creation of manufacturing facilities of crude oil and refinery, working capital arrangements and initial support towards the plantation by the farmers. The total investment required for development of production facilities of up to 2009-10, year of commencement of commercial production, is approximately Rs300 crore.

The majority of Jatropha plantations are planned in the Northeast India , where the company has a substantial presence. The company will be able to add value through its expertise of managing plantation of large size.

The proposed investment of Rs50 crore is subject to necessary approvals and is expected to come through internal generation in the next two years.

"D1 Oils of UK, the joint venture partner, has also entered into an agreement with British Petroleum to invest in Jatropha plantation / creation of bio-diesel manufacturing facilities and through the association of British Petroleum, Dl Williamson Magor Bio Fuel Ltd will be able to access the world market for its product," the release said.

Jatropha Curcus is one of the crops, which has been considered good for producing oil from seeds and this oil after refinement is converted into bio-diesel. The long term IRR on production and manufacture of bio-diesel is estimated at 20 per cent and is likely to remain steady over future period.