IDC to pour R3.2bn into new biofuels projects
March 28, 2007
By Justin Brown
Johannesburg - The Industrial Development Corporation (IDC) and its partners were looking to invest R3.2 billion in two biofuels projects, with first production set for early 2009, project leader Noel Kamrajh said yesterday.
One of the projects will be near Cradock in the Eastern Cape and the other near Hoedspruit in Mpumalanga.
In total, the IDC and the Central Energy Fund (CEF) are looking to develop five biofuel projects. The projects in the Eastern Cape and Mpumalanga are at the detailed engineering study level. Both studies are due for completion by September. Construction is likely to start in January.
The funding parastatal was likely to take a 49 percent stake in both projects, with 25 percent warehoused for empowerment and community groups.
The remaining 51 percent interest will be taken by the CEF and outside partners, who are yet to be selected.
The plan is for the Eastern Cape project to use sugar beets to produce about 90 million litres of biofuel each year, and the Mpumalanga venture to make 100 million litres of fuel from sugar cane.
The IDC and CEF are looking into the production of 150 million litres of biofuel made from sweet sorghum and sugar cane in Pondoland, which spans KwaZulu-Natal and the Eastern Cape.
A fourth project aims for production of 150 million litres of biofuel a year from maize in Ogies in Mpumalanga. Here the maize will be bought from local farmers or traders. The fifth project is to produce 100 million litres of biofuel from cassava in Makhathini in KwaZulu-Natal.
Kamrajh said this strategy would allow a mandate for blendingethanol into petrol at a maximum level of 8 percent.
This required the production of 1 billion litres of bioethanol a year and could contribute 1.3 percent to gross domestic product. These were sufficient incentives to kick-start the biofuels industry, according to Kamrajh.
The draft biofuels strategy proposed a 30 percent rebate on the fuel tax for ethanol, while the proposed rebate for biodiesel was 40 percent.
Kamrajh said that for the IDC's biofuels projects to succeed, there needed to be a 100 percent fuel tax rebate.
The IDC's biofuels projects would be viable at between $50 and $75 a barrel. An oil price below $50 would require incentives for the biofuel sector.
|
|
