Kigali — The government of Rwanda has signed a pact that will see US and UK based companies initiate a US$250 million project to produce bio-fuel in the country.

The investors include London based project finance and development company, Eco Positive and Eco Fuels Global, a US project developer.

The government has already allocated land to the investors in eastern province, near the Akagera National Park on which they will plant Jatropha, the plant which produces the seeds used to generate bio-diesel.

Rwanda's Minister of Natural Resources Stanislas Kamanzi, State Minister for Energy and Water Albert Butare, the CEO of Eco Positive Limited Karl Boyce and CEO of Eco-Fuel Global, Mark O'Brien, signed the deal in Kigali.

The former British Prime Minister Tony Blair witnessed the signing.

The project will see an initial investment of US$50 million and it is projected to start in the next six months. ECO Fuel-Global will do the technical aspects while Eco Positive will mobilize funds.

The CEOs of the two companies say they will develop the project to bring on board other investors.

The officials said they will require 12 million Jatropha trees to produce about 20 million litres of bio-diesel every year.

The state Minister for Energy and Water Dr. Albert Butare said Rwanda has been importing 160 million litres of fuel every year and that the bio-fuel project will cut fuel imports by about 13%.

Butare said the fuel will help to ease transportation problems currently experienced in the country due to the high fuel importation bills.

However, the project will take 5-6 years before it starts production.

The plants will be planted on marginal land where food crops cannot survive. It is expected that the project will employ 6,500 people when it starts processing the fuel.

Prior to the project, Rwanda had started the production of bio-diesel on a trial basis and was looking for partners to make it commercially viable.