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Africa Report


VOL.7 June 2015
Green Fuel Drive

Zimbabwean company battles challenges in its quest to be a regional leader in ethanol production and lower fuel prices By Herbert Moyo

Zimbabwe has a reputation the authorities are not happy with. It is one of the countries in the world where petrol costs the most. According to the website, Zimbabwe ranks 25th in the global list and third in Africa. Only Malawi and the Democratic Republic of the Congo, where petrol sells at $1.49 and $1.51 per liter respectively, have more expensive fuel in Africa. In Zimbabwe, fuel costs between $1.44 and $1.49 per liter, compared to the average world gasoline price of $1.03.

However, that could change. Zimbabwe's first large-scale ethanol producer, a company called Green Fuel, is planning to step up production substantially. Ethanol, a biofuel made from corn or sugar, is blended with petrol to reduce carbon emissions. An upsurge in ethanol production could facilitate a reduction in fuel prices at Zimbabwe's gas stations.

Green Fuel is a joint venture between the state-owned Agricultural and Rural Development Authority (ARDA) and two companies linked to Billy Rautenbach, a well-heeled Zimbabwean businessman dubbed the "Napoleon of Africa" because of his diverse business empire stretching over more than a dozen African countries. Set up at a reported cost of $600 million in 2009, Green Fuel was heralded as Zimbabwe's single largest local investment in the past two decades. It enjoyed a protected monopoly as well as advantageous laws that make it mandatory to blend petrol with ethanol.

However, Green Fuel was beset by numerous challenges. They included low production and complaints from the local Chisumbanje community, who were partially displaced by the project.  

Matters reached Parliament which two months ago released a report, expressing concern about the ethanol producer's failure to provide environmentally friendly fuel, comply with indigenization laws and stimulate investment as well as jobs for the local Chisumbanjes.

The company had to suspend operations in 2010 due to low demand for its product. It reopened only in 2013 after an inter-ministerial committee headed by then Deputy Prime Minister Arthur Mutambara recommended a mandatory blending of petrol with at least 5 percent ethanol. The amount was subsequently increased to 15 percent.

In May, Green Fuel increased production after another shutdown in December. ARDA Chair Basil Nyabadza says the increase will enable the company to raise ethanol levels to 10 percent in the blend and facilitate a dip in fuel prices.

"At a national level, this will improve liquidity in the economy because the government will have cut the fuel import bill by 10 percent," Nyabadza added. "There will also be jobs and skills retention."

A slash in fuel prices will provide relief to motorists and industries which consume petroleum-based fuel.

Green Fuel is also trying to address some of the local community's concerns.

Company officials said Green Fuel has completed its task of resettling 852 villagers on its 172-hectare Munepasu and 182-hectare Chinyamukwakwa irrigation schemes. Now another 810 have to be resettled on the Chisumbanje scheme.

One of the beneficiaries, Gladys Makowa, was harvesting her maize crop with the assistance of fellow villagers when ChinAfrica toured the plant. The 70-year-old said she was grateful to Green Fuel for the allocation of her plot of land.

In Green Fuel's irrigation project, displaced villagers have been allocated 0.5 hectare to grow maize, beans and other vegetables. "The most important benefit is the irrigation facility," Makowa said. "It gives us the rare opportunity of planting and harvesting three times a year, thereby ensuring food security."

Claris Madhuku, a community spokesperson, said the community had no problem with the company as long as it was transparent in its dealings and fulfilled its corporate social responsibilities.

While there is progress, still, more will need to be done to address the outstanding issues. They include compliance with indigenization laws which stipulate that 51-percent shareholding should be ceded to black Zimbabweans. Rautenbach is a white Zimbabwean.

(Reporting from Zimbabwe)





Africa Report
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-Bank On It
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ChinAfrica Staffer Wins "Chinese Dream" Photo Award
-BRICS Means Business
-Cameroon Aims for More Chinese Visitors
-Greening International Relations
-Switch Off Your Lights, Help The Planet
Nation in Focus
-November 2010
-September 2010
-June 2010
-May 2010
News Roundup
-June 2015
-May 2015
-April 2015
-March 2015
-February 2015





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