The project, estimated to entail an investment of $12bn, will have an annual capacity to produce two billion litres of biofuels.
Cosan will supply sugar cane bagasse from its sugar mills for power generation.
Shell intends to adopt next generation biofuel technologies from its joint venture companies, Iogen Energy and Codexis.
The scheme envisages a distribution and retail network for industrial and transportation fuels. Regulatory approvals are now awaited.
The JV intends to explore global business opportunities in production and sales of ethanol and sugar.
