Sugarcane Project to Bring Sugar, Ethanol, Power and Jobs to Tanzania for $550 Million

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Agro EcoEnergy (Tanzania) Limited (Dar es Salaam), a subsidiary of Swedish company EcoEnergy Africa AB, invested $550 million in a sugarcane farming project that will provide power, sugar and ethanol to the domestic market. A special-purpose company, Bagamoyo EcoEnergy, has been set up to develop the plantation and sugar facilities.

Agro EcoEnergy's Executive Chairman Per Carsted estimates ethanol production capacity at the facility will be 10 million liters within three years of operation. The project would have the capacity to provide the domestic market with 130,000 tons of sugar annually, and will be able to generate enough electricity for 100,000 rural households, consuming 1,000 kilowatt-hours (kWh) annually, he said.

Currently, Tanzania imports 50% of sugar needed to meet consumption. It spent about 80% of its total export revenues in 2013 on the importation of oil.

"In order to strengthen the long-term economic and social stability of the project, it is purposely designed to generate significant inclusive growth in the surrounding communities," Carstedt said.

The out-grower program is an essential part of the Bagamoyo project. The sugar mill was designed with over-capacity to give people in the surrounding villages and communities the opportunity to become commercial sugarcane growers.

"The people will be empowered to set up, own and operate independent commercial out-grower companies," Carstedt said.

"The project is estimated to create over 2,000 direct new employment opportunities, plus 1,500 to 2,000 new jobs for small-holder out-growers joined in commercial entities," Carstedt said. "Knowledge transfer will also involve introduction of new technology to the sugar industry of Tanzania as a whole."

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