Tuesday, August 7, 2007

[PBN] UK firm invests $20m in Tanzania biofuel farm

Source: http://www.nationmedia.com/eastafrican/current/News/news0608075.htm

Special Correspondent

Tanzania has landed a Tsh25.3 billion ($20 million) biofuel processing
project that will see large-scale planting of jatropha oilseed crops for
the production and distribution of crude and refined products.

Sun Biofuels Tanzania Ltd, in which Britain's Sun Biofuels Plc has an 88
per cent controlling stake, has already applied for 9,000 hectares of
land in Kisarawe district in the Coast Region, some 70 kilometers from
Dar es Salaam.

The process of land acquisition for the project is at an advanced stage,
awaiting President Jakaya Kikwete's assent. This will see 11 villages of
one of the oldest districts in Tanzania relinquish a total of 9,000
hectares of land to the investor.

Leo Rwegasira, Land Officer for Kisarawe district, told The EastAfrican
last week that Tsh800 million ($632,411.067) has been earmarked by the
investor as compensation to 2,840 households.

The University College of Land and Architectural Studies (UCLAS) carried
out the crop and land evaluation for purposes of compensation, Mr
Rwegasira said.

According to the 2002 population census, there are a total of 11, 277
people residing in the 11 villages. The villages are Mtamba, Muhaga,
Marumbo, Paraka, Kidugalo, Kului, Mtakayo, Vilabwa, Mitengwe, Mzenga 'A'
and Chakaye.

Sun Biofuels had applied for 20,000 hectares in 2005, but authorities
were able to offer just 9,000. The investment has already been
registered by the Tanzania Investment Centre (TIC), which has given the
firm Certificate of Incentives number 010176.

Under the certificate, the investment implementation period is expected
to be between September 25, 2005 and August 2009, and the operative date
is September 1, 2009.

But owing to the existing land regulations, the investors can only get a
title deed — which is being processed— after the villagers have been

Apart from Sun Biofuels Plc of the UK, the company's shareholders are a
British national, Julian Ozanne (10 per cent) and Daudi Makobore and
Herbert Marwa, Tanzanian nationals who own one per cent each. The TIC
requires that any changes in shareholding, project activities and level
of invested capital be notified to the centre.

If the investors fail to start up the project within two years, the
certificate will become invalid and the investors will need to apply for
a fresh one.

Omar Dibibi, Kisarawe District Council Chairman, said the jatropha
biofuel project would catalyse the district's economy and give Kisarawe
residents a new cash crop. Traditionally, cashewnut and coconut have
been the major cash crops in the district.

He said the arrangement between local residents and the investors is
that the former will also be given expertise and seeds to grow jatropha
and sell it to SBC.

The investment is expected directly or indirectly to employ about 1,000
local people for a start, a figure that could rise as the project expands.

Experts say that while jatropha curcas seeds can be used as fuel for any
diesel engine without modification, they are also used in manufacturing
of varnishes, illuminants, soap, pest control and medicine for skin

Dark blue dye and wax can be produced from the bark of the jatropha
curcas, its stem is used as a poor quality wood while the leaves help in
dressing wounds and the roots produce a yellow dye.

Experts say the annual yield per hectare is up to 8 tonnes of Jatropha
seed, which contain over 30 per cent oil. At $320 per tonne, this will
translate into production of jatropha crude oil worth $768 per hectare
per year.

Of potentially equal or greater value is the yield from jatropha seeds
of glycerin. Up to 7 per cent of jatropha seeds are made up of glycerin,
which sells for up to $2,000 per tonne, translating into glycerin sales
of up to $1,120 per year per hectare, or total sales of up to $1,888 per
year per hectare, experts say.

It is understood that the University of Dar es Salaam through the Energy
Department in the Faculty of Engineering, along with the Tanzania
Industrial Research Development Organisation, Kakute Ltd Tanzania and
the Seliani Agriculture Research Institute of Arusha, are involved in
research and development of the crop.

But according to a recent study entitled "Prospects for Jatropha
Biofuels in Developing Countries: An Analysis for Tanzania with
Strategic Niche Management," there are many obstacles in Tanzania's
energy regime that could impede the emerging transition towards jatropha.

Check for earlier Pacific Biofuel posts: http://pacbiofuel.blogspot.com/

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