Sir Richard Branson and the Virgin Group believe that all businesses, especially those involved in transportation, energy and particularly fossil fuels such as coal must be at the forefront of developing environmentally friendly business strategies with a focus on replacing traditional energy with energy coming from renewable sources.
The objective is to demonstrate that Virgin is committing all future proceeds (dividends, realizations and share sales) from our transportation interests (airlines and trains) to be invested into renewable energy initiatives both within these transportation companies and further investments in new biofuel R & D production, distribution and other projects to tackle emissions related to global warming. We currently estimate this commitment to be $3 billion over the next ten years.
Virgin Fuels is the first significant demonstration of this we recently launched initiative. This is a unique new investment vehicle for a series of international renewable energy investments by the Virgin Group with an early focus on bio-fuels (rather than other alternative energy sources or industrial power generation). The scope of the Company's investment strategy will also include research and development of new bio-fuels suitable for both ground transportation and aviation.
Virgin Fuels has an initial funding commitment from the Virgin Group of up to $400 million over three years for biofuel investment and R & D in the field of new biofuels for both ground transport and aviation.
Virgin Fuels is delighted to announce its first investment in the sector against this $3 billion commitment with an investment in Cilion, Inc., headquartered in Goshen, California. Cilion was formed in June 2006 to build and operate ethanol plants that will be cheaper and greener than standard corn-to-ethanol plants, as they substantially reduce the need for fossil fuels in ethanol production. Cilion plans to build seven plants by 2009 with a total of 440 million gallons per year capacity. The first three plants are expected to be in California.
Virgin Fuels led the current investment round in Cilion, which has now raised over $200 million in two financing rounds. The current round includes the Yucaipa Companies and the founding investors, including Khosla Ventures - a leading venture capital firm, and Western Milling - one of the largest grain handling and processing groups in the US and the largest on the West Coast.
Virgin has always worked hard to minimise our environmental impact at every level of our businesses - from operating the youngest fleet of Aircraft of an airline flying anywhere in the world today and the latest fuel-efficient Airbus 340 and Boeing 737 aircraft in our airlines - down to printing double-sided on recycled paper and using fair-trade coffee in our offices. This belief stretches across all of the companies comprising the Virgin Group. Virgin is already utilising a host of environmentally benign technologies including regenerative braking on its electric trains which put 17% of the electricity they use back in to the National Grid of the UK, making them the most energy efficient long distance trains in the world. In addition the company is switching its diesel trains to run on a biofuel mix, as well as funding the world's most fuel efficient experimental high altitude jet, the Virgin Atlantic Global Flyer. At Virgin we are even looking beyond our atmosphere ensuring that Virgin Galactic's newly designed spacecrafts produce vastly fewer emissions per flight than any previous space launch system and are as environmentally benign as<