eBusiness Weekly
. . . as issues of violation of SI are raised
Tinashe Makichi
The joint venture between ethanol producer, Triangle, and the National Oil Infrastructure Company (NOIC) has come under the spotlight amid indications that the two companies flouted statutory procedures by entering into a toll manufacturing agreement.
According to provisions of Statutory Instrument 17 of 2013 for a company to obtain an ethanol blending licence, it must be in a joint venture arrangement with Government at production level.
Close sources said that the two companies only had a joint venture at the toll manufacturing level, against the stipulated rules that require them to have a joint venture from production level.
“The joint venture company does not have machinery or a farm; so ethanol is then sold to the joint venture company by Triangle at 70c per litre and they sell also to Government at 70c plus 20c levies.
“The 70c is shared between NOIC and Triangle, each getting 35c, but Triangle will be getting double by selling to the joint venture company. The legislation does not allow toll manufacturing.”
Green Fuel, which has been the sole producer of ethanol in the country, has reportedly raised the issues on the legality of the joint venture with the Zimbabwe Energy Regulatory Authority (Zera).
The country’s energy regulator is understood to have consulted the industry for an opinion, which is now awaiting determination.
Efforts to get official comment from Zera were however fruitless yesterday.
Government made the decision to liberalise participation in local ethanol production following constant challenges faced by Green Fuel to supply the market usually during the rainy season.
Currently, Green Fuel, a joint venture company between the Agricultural and Rural Development Authority (ARDA) and Macdom and Rating Investments. Until the Triangle/NOIC JV, Green Fuel was Zimbabwe’s sole authorised commercial producer.
On several occasions Green Fuel failed to meet demand for ethanol, prompting Government to engage Triangle Limited, a subsidiary of South Africa-based Tongaat Hulett, to augment supplies.
