Virgin Group launches Virgin Fuels

Sir Richard Branson and Virgin have launched Virgin Fuels, the Virgin Group’s first investment in the sector.

Virgin Fuels will focus on replacing traditional energy with energy coming from renewable sources, and will invest up to $400 million dollars in renewable energy initiatives over the next three years.

Shai Weiss has been appointed Chief Executive of Virgin Fuels and he will be responsible for managing Virgin Group’s investment strategy in the sector. Shai has joined Virgin from ntl, one of the UK’s largest cable communications companies, where he was Managing Director of Products and co-headed the integration between ntl and Telewest.

Virgin Fuels' first deal in the sector is 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.

Shai Weiss will join the Board of Cilion as Virgin Fuel’s representative.

Commenting on the deal, Sir Richard Branson said, “This is a very exciting investment for Virgin and the new company will make a substantial contribution to meeting Governor Schwarzenegger’s goal as stated in his recent Executive Order, calling for California to produce a minimum of 20% of its own bio-fuels by 2010. We have excellent founding partners in Cilion. The industry experience of Western Milling and Khosla Ventures’ track record of building successful companies will complement Virgin’s global expertise in aviation, ground transportation and industrial infrastructure innovation and finance.

We do not intend to limit ourselves to US bio-fuels as we believe that transportation companies have a responsibility to lead and fund research and development of new bio-fuels that can be produced, distributed and used with greater positive environmental impact than the current technologies used in the production of bio-fuels. This is only the beginning of our investment program which begins in the US and will expand to the UK, mainland Europe and other parts of the world.”

In welcoming Virgin’s investment in Cilion, Western Milling’s President Kevin Kruse and Khosla Ventures’ Founder, Vinod Khosla commented: “Virgin’s investment in Cilion, along with new investor Yucaipa Green Fund, uniquely positions Cilion with the funding required to execute the company’s mission of quickly becoming one of the leading ethanol producers in the US. We are looking forward to working closely with Sir Richard Branson and the Virgin Fuels team to create a company which will lead California’s future energy strategy. The Virgin Group has a world-wide reputation for innovation and reaching out to consumers, and their skills and experience will play a key part in Cilion’s success.”

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