eBusiness Weekly
Africa Moyo
Government is working towards producing ethanol from cassava in Mashonaland Central, as part of efforts to increase the availability of the commodity in the country for fuel blending purposes.
The project is currently at the trial stage.
Once it succeeds, there is potential to produce 20 million litres of ethanol annually at the initial stages, a move that would increase the availability of the product.
Currently, there is a serious shortage of ethanol in the country amid indications that Green Fuel’s machine has broken down and is expected back on stream next week.
Indications are that all petrol is unleaded at the moment due to ethanol shortages.
The shortage of ethanol is now piling pressure on the demand for foreign currency, as the country has to import more fuel to fill up the 20 percent gap usually met through local blending.
Ethanol production in Zimbabwe is done by Green Fuel and Triangle.
Green Fuel, a joint venture between ARDA and Macdom and Rating Investments, started operations in 2012 while Triangle started in 1975.
Permanent Secretary in the Ministry of Energy and Power Development Partson Mbiriri, said the Mashonaland Central ethanol project is at the trial stage.
“Certainly, there is a project in its trials in Mashonaland Central where ethanol would be produced up to 20 million litres, initially, if I am not mistaken through cassava,” said Mbiriri.
Mbiriri said this when he appeared before the Parliamentary Portfolio Committee on Energy on Monday.
The identity of the company involved and the size of investment into the project could not be established by the time of going to print as Mbiriri was not picking his mobile phone.
But experts say the coming in of more players would ensure steady availability of ethanol and could also impact positively on the prices.
At the moment, a litre of ethanol Triangle costs 88c while that from Green Fuel is pegged at $1,10c and the coming of more players and as the companies invest in latest technologies in the sector will see the prices coming down.
The price disparity is attributed to the fact that Triangle produces ethanol from molasses after making sugar, which is its core business, while Green Fuel’s fulltime job is to make ethanol.
But there are indications that Green Fuel got a second-hand machine, which had been decommissioned in Brazil because of operational challenges, and more importantly, that it was no longer environmentally friendly.
Energy Portfolio Committee chairman Temba Mliswa, called for more players to avert ethanol shortages as is the case now.
Mliswa said the Reserve Bank of Zimbabwe (RBZ) has funds to support such ventures.
“Open it up and the Reserve Bank will avail money for sugar to be done in many areas. In the Zambezi area, there is a belt where sugar can be grown if I am not mistaken . . .” said Mliswa.
The Rhodesian Government used to grow sugar cane in flat lands along the Zambezi River.
However, Mbiriri said the sector already has no restrictions “in respect of investment in ethanol production cycle”.
The Energy Portfolio Committee has previously raised concern over the ethanol price but nothing has happened.
This week, there were suggestions that it was better for Zimbabwe to import ethanol from Brazil or South Africa where a litre costs 63c and 59c respectively.
It was thought that if the country imported, local producers would be forced to reduce their prices.
However, the proposal was immediately shot down considering that the idea of blending petrol came about as an import substitution plan to minimise use of the much-sought after foreign currency.
Both RBZ Governor Dr John Mangudya and Zimbabwe Energy Regulatory Authority (Zera) chief executive officer Engineer Gloria Magombo, concurred that importing ethanol would be improper given the competition for foreign currency in the country.
Last year, Green Fuel alone produced 78,2 million liters of ethanol enabling the country to conserve at least $26,5 million, which represents 2,65 percent of last year’s import bill.
Green Fuel’s ethanol was blended with 467 391 414 litres of petrol.
Zimbabwe introduced mandatory blending in 2011 to slash the fuel import bill of almost $1 billion, with Green Fuel being the preferred ethanol supplier.
From January to May this year, the fuel import bill hit $374 million and another $657 million is expected to be gobbled between June and December.
This comes as the RBZ plans to increase foreign currency allocations to between $91 million and $101 million per month.
In May, the RBZ allocated $88,8 million to fuel imports.
Central Government has to plan meticulously as foreign currency from tobacco is covering most essential imports and when the marketing season closes by September, there should be an alternative reliable source of hard currency.
