Mozambique Bio-Fuel Industries: Independence, today, through Rural Development

The energy industry, today, is undergoing seismic change. Because the underlying causes for most of the worlds turmoil is due to a lack of energy. In addition to that, the growth in the developing world – Chain and India – adds to the uncertainty. And Bio-energy industrialists are at the epicentre of economic, social and technological change. The direction they chose will either ensure sustainability or not. Mozambique Bio-Fuel Industries believe that the chosen direction depends on the intrinsic social design of the modern bio-energy industry.

Unfortunately scarcity of land for feedstock can be catastrophic for investors who wait for the early adopters to level the playing field.

Even the Indians are running out of suitable land and they are looking towards Africa. Mozambique Bio-Fuel Industries believe the developing world can resolve the bio-energy industrialist’s search for suitable land when they include Africa and specifically Mozambique in their search.

Together we can unlock the power of bio-energy through rural development.

Mozambique Bio Fuel Industries’ intrinsic social design starts with the modular approach to meet the needs of a developing country. By creating energy from bio-mass for bio-power, cultivation of sugar cane for the production bio-ethanol and the cultivation of Jatropha for bio-diesel. Each and every one of these technologies are modular – scaled to create broad based wealth for you and the rural poor Mozambican.

Allow me to take you through the concept.

We, also, designed our process around cash flow issues and efficient and effective utilisation of bio-feedstock. Our initial aim was to produce only crude bio-oil. But the time to harvest bio-oil feedstock and the capital required for land clearing were not cash flow friendly. That’s why we decided to utilize waste bio-mass for bio-power from day one and to include bio-ethanol production in the product mix – bio-ethanol will generate cash in 12 months.

When you consider the unique solutions required by the developing world, then you’ll agree why modular and proven technologies are the only solution. And that’s why Mozambique Bio Fuel Industries has selected technologies from India, South Africa, Malaysia and Brazil.

Off take agreements are critical for Mozambique Bio-Fuel Industries success.

All though we have letters of intent with many European off-takers we can sell all our initial production to Mozambique and other Southern African states. The bio-diesel and bio-ethanol consumed in Mozambique alone are 600 000 MT per year, respectively.

Modular Five megawatt modular bio-power plants will be erected throughout Mozambique.

The wood biomass will be utilised as fuel for bio power generating plants. The average wood in the areas of interest in Mozambique is 100 ton/ha. The average rate of land clearance planned is 25-28 hectares/month per farming unit, or approximately 110 hectares/month per cluster (4000 hectares or 4 agri-techno units).

At this rate, a cluster will be fully developed in just more than 3 years. Each cluster will provide a generating capacity of 5MWe, of which approximately 1MWe will be for own use.

Potential providers for the generating plants have been identified, and a MOU signed for $1050 million over the next 10 years,.

Towards the end of the land clearing phase, the decreasing wood biomass will be replaced, by Jatropha pulp from the bio-diesel production process.

The potential gross revenue from the biomass-power equals more than $10 million per cluster in the first three years.

The electricity provider, EDM, in Mozambique will take all the power we can produce. They have indicated that where bio-power units are far from existing lines they will provide these connector cables.

Because many projects, in Mozambique, were delayed due to the lack of energy (and if you consider that MBFI can consume 100 MWe for every 400 000 hectares), then it’s obvious why power generation is not an option.

Crude Jatropha oil will be extrude on the farming units and then distilled at central distillation units.

Mozambique Bio Fuel Industries selected Jatropha curcas as the ideal bio-diesel feedstock and we will establish it on 90% of the available land.

Why is Mozambique ideal for Jatropha curcas?

The Jatropha curcas plant is an excellent grower of oil containing seeds. It grows wildly in all tropical and sub-tropical areas. The Jatropha tree is a non-edible plant, easy to establish, grows up to two metres in the first year. Bunches of flowers bear fruits. The shelled seeds are oblong with high oil content of an average of 38%. An advantage is that Jatropha grows on marginal land and does not need extensive cultivation, fertilization and irrigation. The Mozambique, conditions are perfect for growing the Jatropha tree. The rainfall in Mozambique will ensure high crops even in marginal land.

The modular bio-diesel units produce 6 million litres per annum at a utilisation of only 34%. The technology is supplied by an Australian company who operates in Malaysia. They also manage the units and provide the finance.

After 18 months, the first bio-diesel from Jatropha will be produced. The gross turnover for every 4000 hectares is expected to be 13 million dollars US.

Bio-Ethanol from sugar cane generates cash flow after only 12 months.

As you know bio-diesel will only generate cash after 18 to 24 months. But ethanol from sugar will reduce the time by 12 months. And ethanol will be used to manufacture bio-diesel, therefore eliminating the need to import methanol.

Sugar production in Mozambique has risen rapidly from 39 000 tones in 1998 to about 240 000 tones in 2005/06, largely due to improved productivity at both the farm and mill levels through a rehabilitation programme implemented by the sub sector in 2000.

MBFI will produce Ethanol gel as a modern renewable fuel. The toxic and flammable paraffin (kerosene) market in South Africa is 700 million litres per year. In Mozambique fossil- and solid fuels are approximately 600 million litres per year.

MBFI will establish four Ethanol producing modular units per cluster producing 540,000lt ethanol per month for GEL purposes.

In Mozambique 16 million cubic meters of wood is burned every year to satisfy the countries energy needs. And although they try to control it, forests are indiscriminately utilised for energy. This leads to floods, a loss of mangroves and income from prawns.

Mozambique Bio-Fuel Industry’s introduction of bio-fuel gel can stop the uncontrolled deforestation. And replace well entrenched traditional charcoal energy.

Environmentally responsible irrigation will ensure consistent crop yields and conservative utilisation of water.

Although Mozambique’s rainfall is adequate it is not consistent. And irrigation will ensure consistency and increased yields. Mozambique Bio-Fuel Industries believe that the future of “Bio fuels crops” depend on a regular water supply, environmental practices and the optimisation of food crops.

We have opted for an environmental low tempo drip irrigation platform, based on uniform application to the active root system zone, of precise amounts of water and fertilizers, combined with rational agricultural knowledge of the plant’s water needs.

MBFI’s ability to create broad based wealth for all parties is pre-designed.

In addition to the modular design our investment structure, rural involvement, technology and environmental principles will ensure a sustainable future.

Rural people are distributed along the main roads in Mozambique.

With our modular design we have no option but to take the technology to the rural poor. Not only will we employ these people, we will educate and purchase feedstock from them. (As long as the feedstock does not compromise their need for food production).

The modular approach counter balance the lack of infrastructure in Mozambique.

Therefore Mozambique Bio-Fuel Industries will not travel long distances with bulky raw materials, but rather travel further with high value compact and final products, like bio-diesel and bio-ethanol. (MBFI selected modular units will operate with 200 and 4000 hectares of feedstock).

Mozambique Bio-Fuel Industries Investment Structure:

With in the holding company MBFI Investments have 75% of the shares and the Mozambique partners the other 25%. At the investor level the investors have 50% of all the shares, MBFI 25% and NGOs and other will have 25% share for rural development. This means that MBFI Investments’ effective shareholding is only 18.75%. The investors have 50% and the Mozambicans have 31.25% of the effective shares.

MBFI not only secure it’s future through modular technology and therefore broad based wealth, we also adhere to local and international environmental laws and regulations.

(i) An Environmental Impact Assessment (EIA) was necessary for the establishment of the project.

(ii) Forest Management Certification involves an inspection of the forest management unit by an independent organization (Certification Body) to check that it complies with the internationally agreed FSC Principles for Responsible Forest Management and FSC standards.

Mozambique Bio Fuel Industries are aware of arguments regarding CO2.

Therefore MBFI will account for all CO2 and ensure that we are not causing an imbalance. What’s more, the CO2 balance of fuels derived from renewable energy sources is much better than that of fuels based on crude oil.

After all, the combustion of bio-diesel releases only the amount of CO2 that the plant removed from the atmosphere when it was growing. Only the amount of energy used for the cultivation, harvesting and transport of the plants plus the energy needed to produce bio-diesel affects the CO2 balance. And in principle, it is possible to significantly reduce that energy figure. But Mozambique Bio-Fuel Industries will reduce that CO2 emissions further, because bio-mass is used to generate our own electricity. And all fuel requirements are met using our own bio-ethanol and bio-diesel.

Investment options.

An investor who invest in a cluster unit (4 agri-techno units) and who want to keep all future profits: Minimum investment required is $8 000 000.

A corporate investor who invest in many cluster units and have the rights to expand the operation to 500 000 hectares: Minimum investment required is $100 000 000.

The Foundation for Mozambique Bio Fuel Industries’:

As indicated previously MBFI’s foundation depends on the modular design that will ensure sustainable broad based wealth (and eradication of rural poverty).

Included in the design is:

The rural development fund. (As discussed above)

A Training Academy for training future plant managers as well as the employees recruited from the local population for involvement in the various MBFI initiatives: – The Academy is envisaged as a state-of-the-art facility utilizing appropriate computer-based training. Being located on the site of the first MBFI Agri-Tech production unit, it will also enable on-the-job training.

The MBFI initiative will specifically focus on socio-economic development, skills development (both technical and life skills) and social fabric enhancement in its partnering with the local population.

The development of entrepreneurship will be another focus point for all the Agri-Tech Bio-fuel production units as well as centralised ethanol refineries and bio-diesel rectification plants.

Lastly, the MBFI initiative will also actively support and promote the development of women through dedicated development programmes, and envisage, for instance, women playing a significant part in cultivating and harvesting crops.

The project will create 600 000 jobs.

Where most of these jobs will become redundant because Mozambique Bio-Fuel Industries will teach the rural community to become independent suppliers of bio-fuel feedstock.

The support from the Mozambican government. When MBFI explained their project to the Mozambican Government they realised the potential and today calls it a programme.

To show their support the Government allocated 3.5 million hectares of land Mozambique Bio-Fuel Industries. In seven provinces they have allocated five hundred thousand hectares. For each province MBFI have a signed document from the Governor. To the left are copies of some of the actual approval documentation received by MBFI for the allocated land.

NOTE: MBFI does not sell land! Mozambique Bio Fuel Industries use allocated Mozambican land to help eradicate poverty through investment. Our aim is to create broad based wealth for all concerned. If you want to buy land we cannot help you. We will only secure land for the bio-fuel project according to the Mozambique Law.

MBFI is fortunate to have one of the ex ministers of environmental affairs as our partner.Dr. Bernardo Ferraz. He is a well respected veteran in Mozambique.  Dr. Ferraz said recently, “It will never happen again that one company will be awarded 3.5 million hectares in Mozambique for bio-fuel development.” We can only agree.

The Multilateral Investment Guarantee Agency (MIGA) is a member of the World Bank Group. Its purpose is to facilitate the flow of foreign direct investment …

MIGA help investors and lenders deal with these risks by insuring eligible projects against losses relating to currency transfer restrictions, expropriation, war and civil disturbance and breach of contract. MBFI and investors can use MIGA to insure our investment.

Exceptional progress was made to date.

The official launch was on 23 February 2006.

Before the launch negotiations where completed with the Mozambique authorities. And $510 000 was invested in the 3 year project. By traveling more than sixty thousand kilometres to negotiate the 3.5 million hectares with all concerned.

After the launch $1.880 million was invested to establish the first modular unit in Nampula, to provide seed capital for a bio-nursery and engineering works.

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We all agree that the scarce land for bio-fuel feedstock can be catastrophic for investors. But with Mozambique Bio-Fuel Industries you can ensure adequate supply of feedstock for bio-diesel and bio-ethanol, while bio-power cover your developing cost and then contributes to the profits.And we guarantee our future by providing entrepreneurship and opportunity for the rural people of Mozambique. Therefore we will help to create broad based wealth for investors and the poor (by eradicating poverty).Wishing you well.Altie Steenkamp
P.S. If you share these values then contact Mozambique Bio-Fuel Industries for more information on how you can invest.CEO Mozambique Bio Fuel Industries
Ahmed Sekou Toure 1919 Maputo
Ernst and Young Auditors , Maputo
Contact Phone Number:
Business 027 73 852 5224