Tanzania: Swedes in U.S$550 Million Tanzania Ethanol Venture

Dar es Salaam, Tanzania — Agro EcoEnergy (Tanzania) Limited, a subsidiary of a Swedish based firm, has invested $550 million in sugarcane farming as part of a power and ethanol project.

Agro EcoEnergy has already set up a special purpose project company, Bagamoyo EcoEnergy to develop a modern sugar cane plantation and factory producing sugar, ethanol and power for the Tanzanian market.

Ethanoal can be used as fuel for motor vehicles.

Per Carstedt, the Agro EcoEnergy's Executive Chairman, told East African Business Week recently, during three years of operation the project is estimated to provide 10 million litres of ethanol.

Carstedt said that the project will also be able to annually provide the domestic market with 130,000 tons of sugar.

He said besides sugar production and ethanol, in this period the project will also be able to generate enough electricity to provide 100,000 rural households consuming 1000KWh per year.

He said the rational for the project comes from the fact currently Tanzania imports approximately 50% of all sugar consumed.

He said that Tanzania also spent about 80% of its total export revenues during 2013 to pay for imported oil.

"In order to strengthen the long-term economic and social stability of the project, it is purposely designed to generate significant inclusive growth in the surrounding communities," he said.

Regarding the outgrower programme, he said is an essential part of the Agro EcoEnergy Bagamoyo project.

He said Agro EcoEnergy has intentionally designed the sugar mill with a major overcapacity that provides an opportunity for people in the surrounding villages and communities to become commercial sugarcane outgrowers.

"The people will be empowered to set up, own and operate independent commercial outgrower companies," he told East African Business Week.

He said that surrounding communities will be able to embrace new opportunities through direct and indirect employment.

"The project is estimated to create over 2,000 direct new employment, plus 1,500-2,000 new jobs for smallholder outgrowers joined in commercial entities," he said.

"Knowledge transfer will also involve introduction of new technology to the sugar industry of Tanzania as a whole," he said.

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