Financial and economic viability of installing sugar cane ethanol plants in the North of Goiás and São Francisco Valley (Bahia)

Abstract

In this study, we calculated the financial and economic viability of installing sugar cane ethanol plants in the North of Goiás and in the São Francisco Valley regions, both in Brazil. Were estimated the NPV and IRR indexes, and sensibility analysis were made with the objective of capture the intrinsic uncertainties in the developed models. The results show higher attractiveness level in the North of Goiás region, even on the basis scenario (100% own capital) as well on the alternative scenario (20% own capital and 80% funded). It was found that the most striking variables on the NPV results were the ethanol selling prices and the average sugar cane productivity.