Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Green Fuel project will not be reviewed — Arda

Green Fuel project will not be reviewed — Arda

Thursday, 04 August 2011 18:27

Paidamoyo Muzulu

THE ambitious US$600 million 20-year build, operate and transfer Green Fuel 
agreement between the Agricultural Rural Development Authority (Arda) and 
businessman Billy Rautenbach’s Ratings Investments will not be reviewed.

The Parliamentary Portfolio Committee on Agriculture had called for the 
review of the agreement to comply with the country’s indigenisation laws 
which state that locals should control at least 51% of all businesses in the 

Rautenbach’s company controls 60% of the company while Arda owns the 
remainder, according to a memorandum of understanding signed in 2007. 
Ratings provided funding and Arda used its land ownership to purchase its 

The Green Fuel project is set to create the biggest ethanol plant in 
sub-Saharan Africa with an expected output of over 40 million litres a month 
when fully operational. Over 5 000 hactares have been put under sugarcane 
production for the project in Chisumbanje. More cane will come from 400 
contracted out-growers from the surrounding community.

Rautenbach’s company is scheduled to hand over complete operation of the 
joint company to government after 20 years. The 20-year period is to allow 
Ratings to recoup its capital outlay in the ambitious project.

Arda chairman Basil Nyabadza said although the present agreement was fraught 
with inadequacies, it would only be reviewed when the economic environment 

“The deal has to be understood from the period it was executed. No one was 
willing to invest in the country and the government was only offering land 
for its share of equity in the partnership,” said Nyabadza.  “No agreement 
is perfect and we will review things as the economic environment improves,” 
he said.

Nyabadza added that parliament had not indicated which aspects of the deal 
needed to be reviewed, thereby leaving the board confused on what changes to 

“Parliament did not tell us which clauses to review. To this day, we are 
still waiting to hear which clauses they need reviewed. However, with time, 
we will start negotiations with Ratings to increase government’s equity in 
the partnership,” Nyabadza said.

The Agriculture Portfolio Committee chairman Moses Jiri told the Zimbabwe 
Independent that the House was of the view that the agreement should be 

“The agreement is against the indigenisation policy and we hope that Arda 
will review it to reflect that policy,” said Jiri. “We intend to call 
Agriculture minister Joseph Made before the committee on matters dealing 
with this agreement.”

However, Nyabadza feels that Arda was correct on this deal saying: “The 
agreement was done in the national interest after the estates were lying 
idle for a long time without any investment.”

The Green Fuel project has changed the economic life of Checheche Business 
Centre in Chipinge. The growth point has since made representation to Local 
Government minister Ignatius Chombo to be upgraded to town status.

The giant ethanol plant will go a long way in saving the country’s resources 
by reducing fuel imports. The plant is expected to produce more than 40 
million litres of ethanol every month when fully operational.

The Ratings deal, like the Essar/Ziscosteel takeover, proves that the 
indigenisation policy is difficult to attain while the country is faced with 
a liquidity crunch. Essar recently bought 54% of Ziscosteel.

Ziscosteel had shut down operations and owed over US$240 million to foreign 
banks in addition to salary arrears and other outstanding statutory 


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