SIR RICHARD BRANSON has joined forces with NTR, an Irish utility group, to take a majority stake in an American biofuel company.

Branson’s Virgin is planning to invest $40m (£21m) alongside an NTR division called Bioverda. The partnership has been disclosed in a recent filing with the US Securities and Exchange Commission.

Their American target, Ethanol Grain Processors, has plans to build plants to manufacture ethanol from crops. The ethanol will be used as a “green” fuel for vehicles. It is understood that under the terms of the agreement, Virgin will step in and pay the full $40m if the Bioverda investment is not ratified by the main NTR board.

Ethanol Grain Processors had planned to float in America. But with the deal with Virgin and Bioverda, it said it was “suspending all offering and sales efforts in connection with its initial public offering”.

Branson has in recent months talked of a “major shift” by Virgin into alternative energy and other environment-friendly technologies. Last month The Sunday Times revealed that Virgin had invested $60m in a Californian ethanol plant alongside two renowned American venture capitalists, Vinod Khosla and Ron Burkle.

NTR is a Dublin-based utility, founded as National Toll Roads. It has interests in waste, wind energy, broadband and toll roads. It is not quoted, but shares in the company are traded in a grey market through Irish brokers. It was valued at close to €1.2 billion (£806m) in a recent fundraising.

It is understood that Virgin and NTR plan to expand into alternative fuels in Europe, with a biodiesel plant in the UK under consideration.

The spotlight will be thrown on green business issues tomorrow when Sir Nicholas Stern publishes a report commissioned by Gordon Brown on the effects of climate change on the global economy.

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