An ethanol plant in Brazil, which is providing the inspiration for ethanol production in the Caribbean.

The agriculture minister, Robert Persaud, said Guyana was aiming for a 10% mix of ethanol with regular gasoline to power vehicles.

The United Nations Economic Commission for Latin America and the Caribbean calculates such a step could save Georgetown at least US$5.4 million annually on fuel imports.

Mr Persaud said the IADB will provide "technical assistance" to Guyana in connection with potential projects by a Brazilian company and several US firms.

"Whatever approach that we take, we want to ensure that we have the best technology," the minister said.

He said Guyana plans to set aside 50,000 acres (20,000 hectares) of land in Canje, an agricultural plantation about 70 miles (112 km) east of Georgetown, to plant special varieties of sugarcane.

"We are identifying virgin lands to plant a new variety of cane other than what we now use to produce sugar and molasses," Mr Persaud said.

Diversify

These varieties have been identified as capable of yielding a large quantity of ethanol.

US industry experts have named Guyana and Jamaica among countries in the Americas with the capacity to expand sugar production for ethanol.

Many producers in Latin America and the Caribbean are looking to diversify and ethanol has become an attractive alternative sugar product.

Last month Brazil's President Luiz Inácio Lula da Silva and U.S. President George W. Bush reaffirmed their interest in developing joint biofuels projects in Central America and the Caribbean.

Guyana hopes eventually to export biofuels to compensate for the coming 36% reduction in the price the European Union will pay for sugar from the nations in the Africa, Caribbean and Pacific group.