Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Ministers haggle over ethanol project

Ministers haggle over ethanol project

Sunday, 20 May 2012 11:34

TWO Cabinet ministers have questioned the manner in which the ethanol 
project in Chisumbanje in Chipinge was started in a new twist to the US$600 
million venture. This comes as the promoters have been at the doors of the 
ministry of Energy and Power Development in a bid to force the introduction 
of mandatory blending and save the project from collapse.

There has been a slow uptake of ethanol from Chisumbanje, as fuel players 
are reluctant to blend the product. As a result, production stopped after 
the plant reached its 10 million litres storing capacity in December last 

The ethanol project is a partnership between the Agricultural and Rural 
Development Authority (Arda) and Billy Rautenbach’s Rating and Macdom 
Investments in a 20-year Build, Operate and Transfer (BOT) arrangement to 
transform estates at Chisumbanje and Middle Sabi.

Rautenbach’s company, Green Fuel, is advocating government endorsement to 
make it mandatory for fuel companies to blend petrol with ethanol, but 
Finance minister, Tendai Biti, said there were outstanding issues that had 
to be addressed first.

Biti said the investor had taken huge Arda estates to produce sugarcane and 
the Zimbabwe Development Trust, which owned land in Naunetsi constituting 1% 
of the country.

“So that estate is now about 4% of Zimbabwe. That land was not bought, it 
was taken for free,” said Biti. “So the government of Zimbabwe is saying 
what is the ownership structure now because you have taken all this land 
which you have not paid for. you have put US$200 million or US$300 million, 
but that is not equal to 4% of Zimbabwe. That must be clarified.”

Biti said the other issue relates to technology, adding that scientists must 
explain whether Zimbabwean cars are ready for blending and at what 

“The third one, is a ministry of Finance issue. The ethanol is being sold at 
US$0,10 less than the ongoing price of hydrocarbons.

“The price of our ethanol production has got a fixed cost structure. How 
then do you say it’s 10% of a volatile, flexible thing, yet we know the 
prices of hydrocarbons are not determined by cost structures — they are 
determined by politics. That is where we are saying, you are being greedy 
and we will not accept it,” said Biti.

The project has continued to be shrouded by concerns to do with 
transparency, as government has not been forthcoming in protecting the 

Energy and Power Development minister, Elton Mangoma, told stakeholders at 
an energy synergy meeting last week that mandatory blending would go against 
market liberalisation in the petroleum industry.
Mangoma said several ministers were distancing themselves from the project’s 
creation, raising fears that the process had not been done properly.

Cabinet set up an inter-ministerial taskforce headed by Agriculture 
minister, Joseph Made, to spearhead an assessment of the project, but 
Mangoma said that Green Fuel representatives were continually approaching 
him and avoiding the taskforce.

“This thing takes time. The viable option is that Green Fuel should be given 
the opportunity to export. As long I’m minister, I will protect the 
interests of the majority. I don’t want to go into the pricing, the facts 
are so murky, and these things must be done properly. Green Fuel has been 
given an opportunity to work with government,” said Mangoma.

Mangoma said government was prepared to issue out licences for ethanol 
blending, right up to E100, but this would all depend on what the market 

“We have to plan and co-ordinate this (biofuel) issue. it’s a confidence 
thing. To cobble the policy in an inclusive government is very difficult,” 
he said, adding that Zimbabwe had no policy to make E10 mandatory.

Biofuel energy is anticipated to help cut the country’s massive fuel import 
bill, provide energy supply security, promote rural development and 
investment, as well as reduce poverty.

Sugar, which is a key element for ethanol production, takes 12 months to 
mature in Zimbabwe while elsewhere, it can take up to 15 months or more.

‘Comprehensive policy on biofuel vital’

Ambassador of Brazil to Zimbabwe, Maro da ‘Silva, told delegates that Africa 
would be one of the best places in the world in the production of biofuel 
due to the abundant sunlight and a wide market.

“The use of biofuel in Zimbabwe will depend on the decisions that are made 
now. Forty-five percent of our own energy matrix comes from biofuel,” she 

“There is need for a comprehensive policy for ethanol production, as the 
state has a pivotal role to determine what’s best for the country.”

She said up to 70 000 small farms  in Brazil were producing ethanol, with 
millions of jobs created by the ethanol industry, while 8% of vehicles 
produced in that country were flexi-fuel, meaning they could  use both 
ethanol and non-ethanol blended fuel.

A 2009 study, titled Bio-Fueling Southern Africa, focusing on Malawi, 
Mozambique and Zambia, acknowledged that the introduction of bio-fuels would 
reduce dependence on petroleum products, stabilise fuel prices, and create 
employment, among other benefits.


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