UPDATE 1-Carlyle, others invest $240 mln in Brazil ethanol

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RIO DE JANEIRO, March 14 (Reuters) - Private equity firm Carlyle Group [CYL.UL] and a group of investors agreed on Wednesday to invest $240 million in a Brazilian ethanol and sugar producer, betting on growing demand for biofuels.

The group, led by Carlyle and private equity firm Riverstone Holdings LLC, will put the funds into Companhia Nacional de Acucar e Alcool (CNAA), a joint venture between sugar and ethanol producer Santa Elisa and Global Foods holding.

Global Foods said in a statement that the Carlyle /Riverstone Renewable Energy Infrastructure Fund pledged $187 million of the total funding. Funding was coordinated by the Dutch ING Bank (ING.AS).

CNAA plans to build at least four sugar and ethanol mills in Minas Gerais and Goias states in Brazil's center-south, Brazil's main sugar-cane producing region.

Total cane crushing capacity will be 20 million tonnes a year from 120,000 hectares of plantations.

"It is CNAA's intention to take Santa Elisa's strength as an industry pioneer for the past 70 years to the newer cane-growing areas of Brazil where efficiency gains are still available...," Allan Kahane, a co-founder of Global Foods, said in the statement.

Kahane, a Brazilian, said that CNAA would be supported by Crystalsev, one of Brazil's biggest sugar and ethanol distributors in which Santa Elisa is the main shareholder.

Santa Elisa, controlled by the Biaggi family, owns three mills and was the first to produce fuel ethanol in Brazil in 1975. It is in merger talks with Companhia Vale do Rosario, which was the target of a recent takeover bid by Brazil largest sugar and ethanol producer Cosan (CSAN3.SA).

Global Foods specialises in global preferential trade access for sugar and ethanol.

The Carlyle Group manages $54 billion and Riverstone, a New York-based $8.1 billion, including $800 million in its renewable energy infrastructure fund.