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    BusinessCorporations to build 1.1 bln birr ethanol plant

    Corporations to build 1.1 bln birr ethanol plant

    Date:

    • Ethiopia eyes aviation biofuel development

    Two state owned enterprises — the Ethiopian Minerals, Petroleum and Bio Fuel Development Corporation and the Ethiopian Sugar Corporation — are going to jointly build an ethanol (power alcohol) refinery at a cost of some 1.1 billion birr.

    The ethanol refinery plant which will have a daily production capacity of 50,000 liters of ethanol from molasses — a bi-product of sugar — will be built in South Omo, Kuraz III Sugar Factory.

    Mulugeta Seid, CEO of the Ethiopian Minerals, Petroleum and Bio Fuel Development Corporation and Endawek Abite, CEO of the Ethiopian Sugar Corporation signed a shareholder agreement on March 19.

    Nadew Tadele, deputy director petroleum and bio fuel development sector, told The Reporter that the Ethiopian Mineral, Petroleum and Bio Fuel Development Corporation will have 80 percent stake on the project while the Ethiopian Sugar Corporation will own the remaining 20 percent shares. According to Nadew, the ethanol refinery will be built in two phases. The first phase of the ethanol plant will have the capacity to produce 50,000 liters of ethanol per day. The second phase of the project will cost 218 million birr.

    Nadew said that the construction of the first phase of the ethanol plant will take 24 months and 872 million birr. “Currently, we are in the process to hire a project consultant. Then we will hire a contractor.”  

    The ethanol refinery will use molasses and bagasse produced at Omo Kuraz I and Omo KurazIII sugar factories built by the Ethiopian Sugar Corporation. 

    According to Nadew, the required finance is secured from the Industrial Development Fund (IDF) of the Ministry of Finance and Economic Cooperation (MoFEC). The corporation planned to build three ethanol refinery plants in the second Growth and Transformation Plan (GTPII). Ethiopia has been using ethanol blended fuel for road transport by mixing 5 percent ethanol with 95 percent gasoline.

    The country’s annual fuel consumption has been growing steadily. At a growth rate of 10-15 percent every year, the annual fuel consumption has reached three million metric tons. The government spends more than USD 2.8 billion on fuel imports consuming 80 percent of the hard-earned foreign currency.

    Since the launch of using blended fuel, 64 million liters of ethanol has been blended with gasoline and saved some USD 50 million. Four blending facilities have been built that discharge 22 fuel tanker trucks. At present Fincha and Metehara sugar factories are producing 30 million liters of ethanol yearly.

    At the Africa Aviation Biofuel Summit held on March 20 at the Addis Ababa Hilton Hotel, state minister of Industry, Mebrahtu Meles (PhD), expressed their government’s firm commitment to utilise bio-fuel and save the growing expenditure on fuel import. Mebrahtu highlighted that the government wants to attract private investment in developing the country’s untapped potential of developing bio-fuels.

    Wondawek, highlighted that the corporation is developing ten sugar projects which will have 13 sugar mills with a capacity of crashing 158,250 tons of sugar cane per-day and produce 6,330 tons of molasses and 1.5 million liters of ethanol daily. Wondawek posed that Ethiopia has a favorite climatic condition to cultivate sugar cane. “We have the potential to develop 500,000 hectares of land for sugar cane plantation. We can crash sugar cane 200 days-a-year and we can harvest 150 tons of sugar cane per hectare. The sucrose content is 14 percent.” Wondawek invited the private sector to work in joint a venture arrangement in sugar development projects.

    The state minister of the Ministry of Mines, Petroleum and Natural Gas, Koang Tutlam (PhD), disclosed that his Ministry is drafting a legal framework on the development of a bio-fuel. Koang said, the draft legal document outlines the participation of the government, private sector and NGOs in the development of bio-fuel sector.

    In the course of the summit, the possibility of utilising aviation bio-fuel was discussed. Experts of Boeing, Roundtable on Sustainable Biomaterials (RSB) and SkyNRG highlighted that Ethiopia can use bio jet-fuel by blending ethanol with jet fuel.

    According to the Ethiopian Petroleum Supply Enterprise, the country imports 6.2 million barrels of aviation fuel at a cost of USD 480 million.

    Ethiopian Airlines chief financial officer, Meseret Abitew, said Ethiopian Airlines spends USD 100 million on jet fuel. “If we can use 5 percent bio jet fuel we can save USD 60 million.” Meseret said Ethiopian is ready and willing to cooperate with all stakeholders on the development of bio fuels.

    Elizabeth Wood, regional director environmental strategy, Boeing Commercial Airplanes, said that Ethiopia has an incredible potential to develop aviation bio-fuel. Wood said Ethiopian Airlines is an advanced airline in Africa that operates most modern and fuel-efficient aircraft. “We worked very closely with them in integrating the B787 jetliners. And we will assist them in using aviation bio-fuel,” she said.

    In the Africa Aviation Biofuel Summit, RSB signed memorandum of understanding with the Ministry of Industry, Ministry of Mines, Petroleum and Natural Gas to collaborate on research and development on bio-fuel development.

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