Uganda's first plant to process jatropha seeds into bio diesel has set aside a total of $2 million for purchasing seeds to start processing the product.

The new plant expected to be the largest in the East African region needs 1000 tons of jatropha seeds per day and will produce 60,000 litres of bio diesel oil per day when it starts.

"We are currently looking for outgrowers to supplement the seeds coming from our 2000 acre farm located in Karamoja in the north east of the country," Ms. Deborah Mawanda, the spokesperson of Cenergy Globe, the firm contracted to mobilise the outgrowers said.

She said the factory, which belongs to African Power Initiative (API) already have a big storage warehouse at Wankonko, in Bugolobi, a Kampala suburb.

API has had a pilot plant next to it that has been processing bio diesel oil from castor (nsogasoga) and candlenut (Kabakanjagala) seeds.

She said the firm which already has a similar plant in Ethiopia, had already trained over 2000 farmers at the factory warehouse.

She said they also provide seeds for the castor and candlenut plant and cuttings for the jatropha. This is because the jatropha cuttings grow much faster than the seeds.

A farmer who plants now can have his first harvest in six months for the castor plants, nine months for the jatropha and four years for the candlenut.

"This is a good opportunity for anybody who has land that is presently unutilised because it can be planted with a crop which doesn't need much attention and a farmer who plants candlenut or jatropha earns $200 per year per acre in carbon credits," she said.

She said API was prepared to buy all the seed the farmers can produce because of the huge capacity of the plant and the size of the market.

Mawanda said the projected demand for the bio fuel currently stands at 100 million litres and is expected to grow to 187 million litres in 2012 and 220 million litres in 2022.

In May this year Uganda's energy minister Hilary Onek urged oil dealers to start mixing fuel with bio-diesel in the proportion of 80% to 20% as is done in other countries to reduce on pollution.