WHITE PLAINS, N.Y. — Bunge Ltd. and BP P.L.C. have finalized the formation of BP Bunge Bioenergia, a Brazilian bioenergy joint venture that combines the two companies’ Brazilian bioenergy and sugarcane ethanol businesses. BP Bunge Bioenergia is now the second-largest operator by effective crushing capacity in the Brazilian bioethanol market, according to Bunge.

Under terms of the transaction, Bunge received cash proceeds of $775 million. The proceeds included $700 million of non-recourse Bunge debt that was assumed by the joint venture at closing and $75 million from BP. Bunge said the proceeds were used to reduce outstanding indebtedness under its credit facilities, resulting in a stronger balance sheet and greater financial flexibility.

The transaction was first announced in late July.

The joint venture will operate on a stand-alone basis, with a total of 11 mills located across the Southeast, North and Midwest regions of Brazil. With 32 million tonnes of combined crushing capacity per year, the joint venture will have the flexibility to produce a mix of ethanol and sugar. It will also generate renewable electricity — fueled by waste biomass from the sugar cane — through its cogeneration facilities to power all its sites and sell surplus electricity to the Brazilian power grid.

BP and Bunge’s assets are largely complementary, with sites in five Brazilian states including three in the key region of São Paulo. The combined business will be ranked the second largest player in the industry in Brazil by effective crushing capacity.