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December 13, 2009

Indian company to advise Ethiopian biofuels venture

by Groum Abate

Indian renewable energy company Praj has signed an agreement with Ethiopia's Eco Energy, a bio-fuel producing company, for providing consultancy in cultivating thousands of hectares for generating bio-fuels.

The growing increase in international oil prices caused the Ethiopian government to consider shifting to the consumption of bio-fuel. On an average, Ethiopia spends over 10 billion birr ($800 million) annually on importing petroleum, consuming about 90 percent of the hard currency earned from foreign trade each year.

Praj will provide consultancy for complete development of the 25,000 hectare area for a large scale sustainable annual energy crop farming system. This will include energy crop solutions and packaging, land management, annual farming, irrigation management and leading farm mechanization aspects.

Eco Energy has been selling shares since last January with the aim of cultivating and refining bio-diesel from non-edible biological feedstock with an investment capital of one billion birr ($80 million).

The agreement also includes providing expertise for the engineering works of the refinery. Dawit Nigussie, sales and marketing manager of Eco Energy, said that Praj has also agreed to support the Ethiopian company in its activities towards securing funds from various international financial institutions.

Eco Energy, a bio-fuel share company expects to raise a capital of 250 million birr ($20 million) and is set to start farming jatropha and castor oil in the country within the next 18 months. According to Dawit, his company is preparing to commence the plantation this coming March in Oromya regional state.

The Indian company is already developing the project of Metehara Sugar Factory's ethanol production in central Ethiopia. A 25-year old company, it operates in more than 45 countries on bioethanol, biodiesel, and brewery plants and related waste water treatment systems.
With an aim to shift from high-cost fossil fuel to cost-effective bio-fuel, Ethiopia's Council of Ministers approved a bio-fuel development strategy. The 15-page strategic document was prepared by Ministry of Mines and Energy in collaboration with experts at Ministry of Trade and Industry and Ministry of Agriculture and Rural Development.
According to Ethiopian Investment Agency, over 60 companies received licenses to participate in the bio-fuel business. However, not more than ten companies have started production. The Ethiopian government has identified 23.3 million hectares of land for bio-fuel investment, with over 17 hectares in the Oromya regions.


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