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September 22, 2008

Swedish biofuels firm invests heavily in Tanzania

Swedish biofuels firm Sekab plans to start producing 100 million litres of ethanol a year in Tanzania by 2012 at a cost of between $200 million and $300 million, a senior company executive said on September 17. Spurred by rising fossil fuel prices and concerns over carbon dioxide emissions that drive global warming, investors are increasingly turning their attention to clean energy projects from sources like biofuels, many of them in Africa.

Anders Bergfors, Sekab Tanzania's managing director, said his company was in talks with the government to use an abandoned ranch north of the commercial capital Dar es Salaam. "We are looking to develop an estate in Bagamoyo, maybe around 10,000 hectares. We might be ready in late 2010 for the (sugarcane) harvest, or it will be more likely to be ready for the harvest in 2010 or 2012," Bergfors said. "We might be producing our first ethanol in late 2010 or beginning of 2011 ... The plant will be maybe 100,000 cubic metres a year of ethanol."

Bergfors, speaking on the sidelines of a regional biofuels meeting, said Sekab had not yet determined the exact cost of the project, but it would be substantial: "A plant this size will maybe be around $200 million to $300 million."

The company has set up a 200 ha farm to grow cane seedlings, and work on the plantation is due to start ext year.

Sekab plans to establish several plantations in Tanzania over the next 10 to 15 years, and Bergfors said it was in talks to acquire more land in Rufiji, to the south of Dar es Salaam.

The company also plans to produce ethanol in Mozambique, where it is in negotiations for about 100,000 hectares of land. "We have already identified a number of areas (there). Maybe that will be developed over five to 10 years," Bergfors said.


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