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Mozambique OKs $280 million, 18,000 hectare sugarcane bioenergy project: 213 Mgy ethanol, 82 MW power

July 17, 2008

In Mozambique, the national government has approved an 18,00 hectare bioenergy park that would provide 213 Mgy of ethanol. 92 MW of energy, and 2,600 jobs. The sugarcane ethanol project will be constructed at a cost of $280 million and is expected to be completed in 2013. Principle Capital is the owner of the project, along with local investors, and the project is slated for Dombe, in Manica province.

UK-based Principle Energy said originally it would invest $250 million in sugar cane ethanol at a facility along the Lucite and Buzi rivers in Mozambique. and that the project would cost $597 million and includes 20,000 hectares for sugar cane cultivation. Yields were projected at 50% more than the Brazilian average, due to superior soil and climate conditions. Final approval from Mozambique is expected by next month.

Mozambique background

Galp Energia and Visabeira Mozambique signed an agreement to produce biofuels from crops such as jatropha planted on up to 150,000 hectares in Mozambique. The resulting oils would be processed either in Mozambique for the domestic market, or shipped to a Galp biodiesel plant in Portugal for the European market.

Petromoc will invest $400 million in a 60 Mgy sugarcane ethanol project in Maputo province. The project will be constructed in partnership with the Agriculture Facilitation Committee between Mozambique and South Africa (COFAMOSA). Petromoc previously established a 7 Mgy pilot biodiesel plant in Matola.

A recent uprising in Mozambique that was characterized as a “food riot” in the UK Independent and other international media, was in fact a series of fuel riots, according to local sources. The protests occurred when local drivers called on the government to increase fares by 15 percent after a 30 percent increase in the cost of diesel. Roadblocks of burning tires and dumpsters appeared at bus depots, and men armed with rocks and clubs threatened local drivers.

Riots erupted in Chokwe, in the southern Mozambican province of Gaza, as well as Maputo. Four deaths were reported in the uprising, which resulted in a rollback in the scheduled fuel price increase.

Local observers agreed that there is ongoing concern that the continuing rise of the cost of wheat and consequent rises in the cost of bread might provoke popular disturbances.

President Armando Guebuza of Mozambique said that biofuel development will not dislodge Mozambican farmers from their lands. He said that government policy would require the use of underutilized or empty lands, would avoid using lands used for food production, and that Mozambique will refine its own raw materials.

Mozambique has been rapidly expanding its biofuels capabilities and plans since Brazil and Mozambique signed a cooperation agreement for sharing resources in biofuels production and training.The largest announced project is the launch of the Central African Mining and Exploration Company (CAMEC) biofuel project. CAMEC will invest US$510 million, and in produce 32 Mgy of ethanol from 30,000 hectares of sugar cane. The venture is expected to create 7,000 jobs. The plant is expected to commence operation in 2010. The financing of the plant and surrounding infrastructure was not disclosed.

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    Written by Jim Lane · Filed Under International 

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