President Chavez calls for energy independence in Africa, at AU Summit

Venezuelan president Hugo Chávez presented four integration projects before the African Union summit that closed Sunday in Gambia. One of Chavez's propositions is the creation of a commission to promote an energy strategy to extend the integration project of Petrosur to African nations, including the oil, gas and petrochemical sectors. He said through "Petrosouth", as the initiative has been dubbed, the leaders would harness the power of oil, which he called a powerful instrument for social development, to develop their peoples.

"It was used by the colonialists (to oppress us). We are now going to use it to liberate our peoples," the President said. He recalled Venezuela has one of the largest oil and gas reserves in the world and has recovered the handling of its petroleum industry, while Africa, he said, has about 15 per cent of the world's fuel deposits and gets 'ripped off' by Western oil companies, calling those of the US 'Count Dracula'.

The head of state of the South American nation rendered the speech during the inaugural ceremony of the summit where 50 African heads of government are participating to focus on regional integration. Much to the despair of Western diplomats, the AU invited some of the world's staunchest anti-American leaders, amongst them Iranian president Ahmedinejad.

Professor Shadrack Gutto, present at the Summit explains Chavez's presence: African countries were eager to hear about Chavez's policies toward Western oil companies. "Chavez has taken quite a radical line with regard to claiming national sovereignty over natural resources and that resonates with a lot of African countries emerging as substantial producers," Gutto said. He said African producers were anxious to ensure they maximised the benefits of their resources and were not being short-changed in contracts with Western oil companies.

More information:

• "Chavez Presents Integration Projects in African Summit", Prensa Latina.
• "Chavez proposes South-South cooperation at AU summit", AngolaPress.

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Biofuels in Africa - How about some cassava in your tank?

The Network Journal, an African professionals and small business magazine has an interesting story about the entrepreneurial drive towards introducing biofuels in Africa.

If you’re planning to go into a business, it says, consider cassava (about which we reported numerous times, [here, here and here] and which we consider to be one of the most versatile energy crops). Called manioc in some countries, cassava often is described as “white gold” because of the many lucrative uses for its tubers and high-protein leaves, including edible products, starch, pharmaceutical products, livestock feeds and, yes, ethanol.

Ethanol has become the poster product for the shift from fossil fuels to biofuels as crude oil, and consequently gasoline, prices soar to teeth-clenching levels for consumers. Exacerbating the price squeeze, notes Peter Kegode, a sugar industry and ethanol specialist in Kenya, is the disruption of Nigeria’s crude oil supplies due to civil unrest, the standoff between the United States and Iran over the latter’s nuclear ambitions and China’s voracious appetite for energy to support its industrial growth. Added to all this are predictions that petroleum production will peak sometime before 2020.

Nowhere has the case been made for ethanol and other plant-derived fuels more than in Brazil, where some 4 million vehicles run on ethanol alone and 25 percent of the regular fuel supply is plant-derived. According to the Council for Biotechnology Information, Brazil’s use of ethanol and other biofuels has replaced oil imports worth about $120 billion.

All this is good news for Africa’s farmers—particularly sugarcane farmers—and the continent’s largely agriculture-based economies. The European Union’s decision to slash the guaranteed price of sugar imported from its member countries’ former colonies in Africa, the Caribbean and the Pacific is wreaking havoc on the sugar industry in those countries. The industry’s conversion to ethanol production could alleviate a great deal of economic angst.

Most of the biofuels used today are derived from corn, soybeans and sugarcane. But all across Africa, academic, government and corporate research centers are studying other biofuel sources, including cassava, sunflower seeds and even shea butter. The International Energy Agency predicts farmers could supply the world with about 10 percent of its gasoline by 2025, if costs continue to decline and governments support expansion of biofuels.

Besides opportunities for small businesses, there are encouraging signs of support for biofuels in Africa by bigger companies and state institutions:

• In May, Actis Capital LLP, a private equity fund with a $3 billion portfolio, allocated $100 million for investment in agri-business in sub-Saharan Africa.
• South Africa's Energy Development Corp., a division of the state-owned Central Energy Fund, is buying a 25.1 percent stake in Ethanol Africa, a company set up by commercial farmers to turn surplus corn into environment-friendly biofuel. Also in South Africa, a biodiesel plant in Wesselsbron operates on locally grown sunflower seeds. The plant has a 5,000-liter-per-day capacity.
• Kenya is moving into the biofuel supply chain using commodities such as sugarcane, maize and sorghum. The country has two ethanol plants but needs five—two in maize-producing regions and three in sugar-producing zones to assure adequate supplies for domestic blending or export, Kegode says.
• In Namibia, so-called invader bush presents a unique opportunity for farmers to become electricity suppliers to the local market, which is plagued by a power crunch. The bush has infested 26,000 hectares of land, threatening the sustainability of the beef industry. Opportunities exist to use the bush for biomass energy, such as cooking fuel, large-scale electricity generation, charcoal production and ethanol production. The Namibia Agricultural Union’s Bush Utilization and Debushing Committee has compiled a project proposal that is available to investors.
• Investment in Nigeria’s cassava sector is becoming attractive to small- and medium-sized investors since the government declared that cassava flour must constitute 10 percent of bread flour. To date, officials say, only 3 million hectares of Nigeria’s more than 70 million hectares of agriculturally suitable land is being cultivated annually to produce 45 million metric tons of cassava tubers (19 percent of the world’s production). The potential clearly exists for cassava production to satisfy both subsistence and commercial demand, Alli says.
• Swaziland’s sugar industry, once the country’s top export earner, is turning to ethanol production in a desperate bid to keep itself alive. Swaziland is a beneficiary of the EU’s price subsidy. The EU also purchased 30 percent of the country’s production. Last year, EU officials renegotiated their contract and are paying 37 percent less for Swazi sugar, throwing thousands out of work. The Royal Swaziland Sugar Corp. can distill 14 million liters of ethanol annually, but a $21 million Ethanol Expansion Project is expected to boost capacity to 32 million liters a year. Meanwhile, South Africa’s Logichem has been working on a $17.3 million distillation facility since September 2005, with a view toward exporting Swazi ethanol to Southern Africa and elsewhere.

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