Prodi (left) and Da Silva (right)

(AP):

Brazilian President Luiz Inacio Lula da Silva and visiting Italian Premier Romano Prodi will try to strike a partnership on producing ethanol and biodiesel in Brazil and Africa, the two leaders said yesterday.

After meeting with the powerful Sao Paulo Federation of Industries, Prodi announced that Brazilian and Italian energy companies will likely build four biodiesel plants in Brazil at a cost of US$480 million (?€360 million).

Prodi also said he thought a deal would be reached later Monday naming Angola as first African nation where the nations will team up on biodiesel.

The premier, who will meet with Silva in the capital of Brasilia today, did not mention any possible ethanol projects, but the Brazilian president said on his biweekly radio programme that "Italy is willing to engage in a partnership with Brazil in the area of ethanol and biodiesel production to help African countries."

European Union leaders have agreed to produce 20 per cent of their energy from renewable sources such as cane ethanol by 2020, and Italy does not have the capacity to do that alone, Prodi said.

Italy's move to renewable fuels requires structural changes, making Brazil an obvious ally, Prodi said.

The partnership between Brazil's state-run oil company Petroleo Brasileiro SA and Italian energy company Eni SpA will focus on biodiesel plants in Brazil and Africa to export the fuel to Italy, a Petrobras exe-cutive said last week.

Petrobras downstream director Roberto Costa said Eni officials showed interest in the construction of biodiesel plants in Mozambique. Ethanol projects also may be considered.

Biggest ethanol exporter

Brazil is the world's second-largest producer of ethanol and its biggest exporter.

The Italian government has a stake of about 30 per cent in Eni, while the Brazilian government owns 60 per cent of Petrobras.

Brazil, Latin America's largest nation, is ramping up production of biodiesel, and will require a 2.0 per cent blend of biodiesel in regular diesel starting next year.

That percentage will rise to 5.0 per cent by 2013.

Prodi is also expected to discuss the possible extradition of Cesare Battisti, a 52-year-old radical-turned-mystery-novelist, who was arrested in Rio de Janeiro earlier this month after hiding in Brazil since 2004. Battisti was convicted in absentia of two 1970s killings and faces a life sentence in his home country.

Battisti was tracked down in an operation overseen by police from Italy, Brazil and France, where he lived after fleeing Italy in the 1980s.

"I hope the Brazil-Italy-France cooperation that led to his arrest will continue between thethree countries," Prodi told reporters.