April 14, 2009 / 1:09 PM / in 11 years

Mozambique ethanol project draws investment

MAPUTO (Reuters) - Foreign companies have invested about $710 million in Mozambique to produce 440 million litres of ethanol a year from sugar cane, a government official said on Tuesday.

Roberto Albino, director of the Mozambique government’s Centre for Agricultural Promotion (Cepagri), told Reuters that 48,000 hectares has been set aside for the production of sugarcane across six provinces in the southern Africa country.

“The money is coming from three foreign companies, ProCana, Principle Energy and Groun Resources,” he said.

ProCana Ltd. is a Mozambican company which has an investment agreement with Mozambique’s government ethanol plant.

Principle Energy is a renewables energy company in which London-listed fund manager Principle Capital has a significant undisclosed stake.

Albino said the projects could generate between 7,000 and 10,000 jobs.

Mozambique has approved biofuel projects using ethanol as the primary source since 2007.

Albino said Cepagri has various proposals for ethanol production from cane sugar and sorghum, being considered throughout Mozambique.

“If all projects were approved it would mean by 2020 an area of between 80,000 and 130,000 hectares would be under cultivation producing between 835 million and 1.6 billion litres of ethanol a year”, he said.

“The government has received a series of other proposals to produce ethanol, not only from sugar cane, but also from millet, in no less than six provinces”, said Albino.

CEPAGRI said most of this ethanol would be exported to the European Union.

Last month, Mozambique drafted a strategy for the production of biofuels from the drought-resistant jatropha crop, which contains up to 40 percent oil.

Jatropha is a non-food crop whose oil can be used to produce biodiesel. It can be grown on semi-arid land and its proponents say it poses less of a threat to food production than other biofuel feedstocks such as grains and vegetable oils.

The government said it has received requests to open up more than 5 million hectares of land for the production of bio-diesel, with coconuts, sunflowers and the weed-like jatropha plant being tested as possible feedstock.

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