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Chisumbanje Ethanol Plan save US10 million monthly

By Sydney Kawadza

Since its birth through a joint venture between the Agriculture and Rural Development Authority and investors - Rating and Macdom - the US$600 million Chisumbanje Ethanol Project has courted controversy.

green-fuel-plant-550

The kind of controversy associated with the ethanol plant could have been genuine through fears of change on the part of the community, political bickering and uncertainty associated with a new project.

Besides Arda and its investment partners, many Zimbabweans cannot attest to knowing much about petrol blending, especially using ethanol.

The same project had been earmarked for Masvingo province but the political leadership and the would-be affected community vehemently opposed the idea.

However, the leadership at Arda decided to take the project to Chisumbanje, on the opposite side of Save River, and used the vast tracts of land at Arda Chisumbanje and Arda Middle Sabi.

The new company, Green Fuel, had to reclaim the land that is still State property from the illegal settlers. The communal farmers could not be pushed off their land, leading to stiff resistance.

Green Fuel had to rehabilitate the infrastructure, initially, at Arda Middle Sabi, where the pump, pipes and water weirs and canals had been destroyed.

The company had also invested in heavy machinery including satellite controlled planting machines, combined harvesters, tractors and other state-of-the-art implements. The local political leadership and business community could not stomach such a development in their area.

However, traditional leaders showed their support for the project as they led the traditional ceremony accepting the project in their area, officially launching the construction of the US$600 million Chisumbanje Ethanol Plant. While construction was expected to take over 10 months, the project was completed in a record seven months with the first ethanol seeping through the pipes in September last year.

Within three months, ethanol stocks had outgrown Zimbabwe's carrying capacity.

The Chisumbanje Ethanol Plant was producing 10 million litres of anhydrous ethanol per month against an uptake of 500 000 litres from the local market.

The 10 million litres represented 20 percent of Zimbabwe's fuel requirements.

The plant also produced 20mW of electricity of which 15mW were to be sold to the Zimbabwe Electricity Transmission and Distribution Company.

The project had its own benefits including, Saving US$10 million per month in the fuel importation bill.

  • Corporate taxes from the investors US$3 million injected into Zimbabwe's economy
  • Value Added Tax on sugar-cane of up to US$1 million per month US$100 000 per month water payments to Zinwa Foreign currency through exportation
  • Reduced carbon footprint, less carbon dioxide emissions from vehicles

What was only needed was for Government to introduce mandatory blending of petrol.

This, starting at a modest 10 percent for E10, the fuel that is currently available on the local market, with plans to increase the blending to at most E85.

But the project has since been met with stiff resistance from elements in Government. Is the project failing to gain support in Government, Cabinet or Parliament because of the political differences?

There seems to be a deliberate bid in the inclusive Government to frustrate the growth of the project because it was initiated by Zanu-PF.

The current Energy and Power Development Minister Elton Mangoma has not embraced the project.

As the deputy treasurer-general at the MDC-T, is Minister Mangoma threatened by the success of such a massive Zanu-PF initiated project?

The former Energy and Power Development Minister Elias Mudzuri went on a Cabinet approved fact-finding mission in Brazil, met Brazilian official and supported the project based on its huge potential for development in Zimbabwe.

What was Mr Mudzuri's fate? One might need to ask. Was his demise linked to his support of the project?

There seems to be resistance also from foreign multinational companies as locally produced ethanol effectively means a reduction in profits taken out of Zimbabwe. This uncontrollable market factor is not well received by the multinational companies as it is viewed as a reduction in profit margins.

There are reports, politically motivated, that suggest that the project had displaced villagers who are now refugees in Mozambique. Where are the facts?

Since the plant stopped producing ethanol in February this year, thousands have lost their jobs. Technical experts, Zimbabweans for that matter, had trekked back home but most of them have since resigned.

There are forces behind the slow uptake of the ethanol to the detriment of the nation including artificial suppressed demand. The companies are reluctant to invest in the necessary infrastructure to take up the ethanol blend.

This has the communities that were providing labour Villagers from Chiredzi, Chipinge and Chimanimani are out of employment. The company has retained over 4 000 workers at the estates but their salaries have been reduced by 45 percent since last month.

Green Fuels had the workers on full salary since February without any production at the plant.

All things said and done, who is working against the project in our inclusive Government? Here is a project that has the potential to bring real change to the people and the nation at large - Herald.