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Study: “Biofuels Project Will Require Investment of Around $190M”

Study: “Biofuels Project Will Require Investment of Around $190M”

The development of the biofuels market in the country will require a total investment of around 13.9 billion meticals (190 million dollars), according to a feasibility study commissioned by the Ministry of Economy and Finance (MEF) from consultancy firm Green Light. This study aims to support the implementation of measure 10 of the Economic Acceleration Measures Package (EAP), which provides for the compulsory blending of biofuels in liquid fuels imported for domestic consumption.

The report, consulted this Monday (7) by DE, which was drawn up with the aim of promoting the use of renewable fuels in the country, predicts that the investment will be divided between the production of 71 million litres of biodiesel and 82 million litres of bioethanol.

For biodiesel production, the study estimates an investment of 6.9 billion meticals, while bioethanol production will require 6.8 billion meticals. This amount includes equipment purchase costs, agricultural development and other expenses related to the implementation of the project.

Biofuel production in Mozambique will be based on crops already grown in the country, such as sugar cane and cassava, and molasses, a by-product of sugar production, could cover up to 50 per cent of the national demand for bioethanol in the first year of the project. It is estimated that 27,000 hectares of sugar cane and 107,000 hectares of cassava will be needed to reach the production targets initially planned.

The study also identifies strategic areas for the development of this sector, pointing to the Centre, with districts such as Dondo and Chiúta, and the North, with Angoche and Cuamba, as regions with great potential for biofuel production. These areas were selected on the basis of detailed analyses that took into account factors such as soil suitability and the existence of transport infrastructure.

‘The biofuels project could not only reduce Mozambique’s dependence on fossil fuels, but also create new economic and employment opportunities, especially in the agricultural sector,’ the study emphasises. In addition, the report states that the project is in line with the government’s efforts to promote the energy transition and contribute to mitigating climate change.

According to the study, the final cost of producing biodiesel will be approximately 121.41 meticals (1.9 dollars) per litre, while bioethanol could cost between 57.51 meticals and 89.46 meticals (0.90 and 1.4 dollars) per litre, depending on the optimisation of the production processes. The Green Light consultancy, which led the study, stresses that there is room to reduce these costs in more favourable scenarios, namely through logistical improvements and greater efficiency in production.

The implementation of measure 10 of the SAP, which requires biofuels to be blended into imported liquid fuels, will be an important step in boosting this sector. ‘The development of a robust and sustainable value chain for biofuels could turn Mozambique into a major player in the region, both in terms of domestic consumption and exports of renewable fuels,’ reads the document.

The report concludes that, despite the high initial investment, the long-term economic and environmental benefits are significant, allowing the country to advance in the adoption of a low-carbon economy and create a competitive biofuels industry in the regional context.

Read the full report.

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Felisberto Ruco

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