Colombian ethanol output is expected to more than double to 2.42 million liters a day by the end of 2009 as new projects come onstream, Agriculture Minister Andres Fernandez Acosta said on Wednesday.

He told Reuters in an interview that Colombia, the number two ethanol producer in Latin America after Brazil, was seeking new investors to join projects to boost ethanol production capacity and create jobs in the South American country.

Fernandez Acosta, visiting London to promote biofuel investments in Colombia, said six new projects this year would add 1.37 million liters a day of new production to the present level of 1.05 million liters a day. He gave no details.

Colombia is seeking to boost its ethanol and biodiesel production to meet stringent targets for blending biofuel with petrol in the coming years.

We're doing all we can to motivate national and foreign investment in biofuels, Fernandez Acosta said as he wrapped up a four-day trip to London.

Companies which invest in building biofuel capacity in Colombia would benefit from a low tax rate of 15 percent, as long as the investment was for at least $16.4 million or involved creating 500 or more jobs.

Foreign companies have already invested in ethanol projects in Colombia. London-based soft commodity merchant ED&F Man invested with a Latin American partner in a $240 million project being developed to make ethanol in the central Boyaca region.

In Colombia, sugarcane is the feedstock used to manufacture fuel ethanol, while palm oil is used to make biodiesel.

Fernandez Acosta said Colombia had the potential to grow sugarcane for biofuel production in an area of 3.9 million hectares, sharply up from 478,000 hectares today.

Our main goal is to generate jobs and have an environmentally friendly policy, the minister said.

He said Colombia's fuel ethanol industry, derived from sugarcane, now employed some 89,000 people.

Fernandez Acosta said that by 2012, at least 20 percent of vehicles assembled or imported to Colombia should have flex fuel engines capable of using a blend of up to 85 percent biofuel.

(Reporting by David Brough, editing by Keiron Henderson)

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