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Mozambique: Ethanol Plant in Manica Approved
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Agencia de Informacao de Mocambique (Maputo)
16 July 2008
Posted to the web 16 July 2008
Maputo
The Mozambican government on Tuesday approved a large biofuel project, under which 18,000 hectares in Dombe, in the central province of Manica, will be planted with sugar cane for the production of ethanol.
The project, budgeted at 280 million US dollars, belongs to the company "Mozambique Principle Energy". Although the government spokesperson, Deputy Education Minister Luis Covane, told reporters that this firm is owned by Mozambican and Mauritian interests, its parent company, Principle Capital, is registered in London, and also has offices in Geneva and Cape Town.
The goal of Principle Energy is to produce 213 million litres of ethanol a year, starting in 2013. This will require a production of 2.5 million tonnes of sugar cane a year (12,000 tonnes of cane per hectare).
This project also includes the production of 82.2 megawatts of energy, starting in 2012. The company itself will use 20 per cent of this, and supply the remainder to the national grid.
The project is expected to create about 2,650 jobs. The company will also build a bridge over the Lucite river, and some social infrastructures for the benefit of the residents of the surrounding areas.
Covane explained that in approving this project, the government took into account aspects such as water supply, because sugar cane plantations need a great deal of water, and the Lucite river will be the source.
The government expects that this undertaking will be a major contributor to the state treasury, paying about 57 million US dollars in taxes in 2011, a figure that should grow to 119 million dollars by 2012, and to 144 million in the following year.
Principle Capital announced the launch of Principle Energy in December 2007, when it said that it had secured funding for the first phase of the Dombe project. It claimed that it had already raised some 70 million dollars in equity funding which would take the projects into 2009. It expected to raise a further 90 million dollars of equity, possibly through a public offer of shares. The rest of the money would be project finance (bank loans).
The company also announced that, thanks to the quality of the soil, the Manica climate, and irrigation, expected cane yields at Dombe are 50 per cent higher than the average in Brazil, which is the world's largest sugar cane ethanol producer.
Last year the government approved PROCANA, an even larger ethanol project which will involve planting 30,000 hectares with sugar cane in Massingir district, in the Limpopo Valley, in the south of the country. The foreign investor here is the London-based Central African Mining and Exploration Company (CAMEC), better known for its mining of copper and cobalt in the Democratic Republic of Congo.
President Armando Guebuza laid the first stoner for the construction of the PROCANA ethanol plant last December.
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| Copyright © 2008 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections -- or for permission to republish or make other authorized use of this material, click here. | |||||||||||||||||||||||||||||
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