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    Spanish company Ferry Group is to invest €42/US$55.2 million in a project for the production of biomass fuel pellets in Bulgaria. The 3-year project consists of establishing plantations of paulownia trees near the city of Tran. Paulownia is a fast-growing tree used for the commercial production of fuel pellets. Dnevnik - Feb. 20, 2007.

    Hungary's BHD Hõerõmû Zrt. is to build a 35 billion Forint (€138/US$182 million) commercial biomass-fired power plant with a maximum output of 49.9 MW in Szerencs (northeast Hungary). Portfolio.hu - Feb. 20, 2007.

    Tonight at 9pm, BBC Two will be showing a program on geo-engineering techniques to 'save' the planet from global warming. Five of the world's top scientists propose five radical scientific inventions which could stop climate change dead in its tracks. The ideas include: a giant sunshade in space to filter out the sun's rays and help cool us down; forests of artificial trees that would breath in carbon dioxide and stop the green house effect and a fleet futuristic yachts that will shoot salt water into the clouds thickening them and cooling the planet. BBC News - Feb. 19, 2007.

    Archer Daniels Midland, the largest U.S. ethanol producer, is planning to open a biodiesel plant in Indonesia with Wilmar International Ltd. this year and a wholly owned biodiesel plant in Brazil before July, the Wall Street Journal reported on Thursday. The Brazil plant is expected to be the nation's largest, the paper said. Worldwide, the company projects a fourfold rise in biodiesel production over the next five years. ADM was not immediately available to comment. Reuters - Feb. 16, 2007.

    Finnish engineering firm Pöyry Oyj has been awarded contracts by San Carlos Bioenergy Inc. to provide services for the first bioethanol plant in the Philippines. The aggregate contract value is EUR 10 million. The plant is to be build in the Province of San Carlos on the north-eastern tip of Negros Island. The plant is expected to deliver 120,000 liters/day of bioethanol and 4 MW of excess power to the grid. Kauppalehti Online - Feb. 15, 2007.

    In order to reduce fuel costs, a Mukono-based flower farm which exports to Europe, is building its own biodiesel plant, based on using Jatropha curcas seeds. It estimates the fuel will cut production costs by up to 20%. New Vision (Kampala, Uganda) - Feb. 12, 2007.

    The Tokyo Metropolitan Government has decided to use 10% biodiesel in its fleet of public buses. The world's largest city is served by the Toei Bus System, which is used by some 570,000 people daily. Digital World Tokyo - Feb. 12, 2007.

    Fearing lack of electricity supply in South Africa and a price tag on CO2, WSP Group SA is investing in a biomass power plant that will replace coal in the Letaba Citrus juicing plant which is located in Tzaneen. Mining Weekly - Feb. 8, 2007.

    In what it calls an important addition to its global R&D capabilities, Archer Daniels Midland (ADM) is to build a new bioenergy research center in Hamburg, Germany. World Grain - Feb. 5, 2007.

    EthaBlog's Henrique Oliveira interviews leading Brazilian biofuels consultant Marcelo Coelho who offers insights into the (foreign) investment dynamics in the sector, the history of Brazilian ethanol and the relationship between oil price trends and biofuels. EthaBlog - Feb. 2, 2007.

    The government of Taiwan has announced its renewable energy target: 12% of all energy should come from renewables by 2020. The plan is expected to revitalise Taiwan's agricultural sector and to boost its nascent biomass industry. China Post - Feb. 2, 2007.

    Production at Cantarell, the world's second biggest oil field, declined by 500,000 barrels or 25% last year. This virtual collapse is unfolding much faster than projections from Mexico's state-run oil giant Petroleos Mexicanos. Wall Street Journal - Jan. 30, 2007.

    Dubai-based and AIM listed Teejori Ltd. has entered into an agreement to invest €6 million to acquire a 16.7% interest in Bekon, which developed two proprietary technologies enabling dry-fermentation of biomass. Both technologies allow it to design, establish and operate biogas plants in a highly efficient way. Dry-Fermentation offers significant advantages to the existing widely used wet fermentation process of converting biomass to biogas. Ame Info - Jan. 22, 2007.

    Hindustan Petroleum Corporation Limited is to build a biofuel production plant in the tribal belt of Banswara, Rajasthan, India. The petroleum company has acquired 20,000 hectares of low value land in the district, which it plans to commit to growing jatropha and other biofuel crops. The company's chairman said HPCL was also looking for similar wasteland in the state of Chhattisgarh. Zee News - Jan. 15, 2007.

    The Zimbabwean national police begins planting jatropha for a pilot project that must result in a daily production of 1000 liters of biodiesel. The Herald (Harare), Via AllAfrica - Jan. 12, 2007.

    In order to meet its Kyoto obligations and to cut dependence on oil, Japan has started importing biofuels from Brazil and elsewhere. And even though the country has limited local bioenergy potential, its Agriculture Ministry will begin a search for natural resources, including farm products and their residues, that can be used to make biofuels in Japan. To this end, studies will be conducted at 900 locations nationwide over a three-year period. The Japan Times - Jan. 12, 2007.

    Chrysler's chief economist Van Jolissaint has launched an arrogant attack on "quasi-hysterical Europeans" and their attitudes to global warming, calling the Stern Review 'dubious'. The remarks illustrate the yawning gap between opinions on climate change among Europeans and Americans, but they also strengthen the view that announcements by US car makers and legislators about the development of green vehicles are nothing more than window dressing. Today, the EU announced its comprehensive energy policy for the 21st century, with climate change at the center of it. BBC News - Jan. 10, 2007.

    The new Canadian government is investing $840,000 into BioMatera Inc. a biotech company that develops industrial biopolymers (such as PHA) that have wide-scale applications in the plastics, farmaceutical and cosmetics industries. Plant-based biopolymers such as PHA are biodegradable and renewable. Government of Canada - Jan. 9, 2007.

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Monday, September 18, 2006

"Africans have the potential to become the Arabs of the biofuel industry"

The UN Integrated Regional Information Networks offer an interesting and critical overview of the current state of affairs of the African biofuels industry. Amongst some Africans the enthusiasm is growing, so much so that Johan Hoffman, chief executive of Ethanol Africa, the company that plans to build eight biofuel factories across South Africa goes so far as to say that "Africans have the potential to become the Arabs of the biofuel industry." But there are many pitfalls, dangers and uncertainties left in this emerging and world changing sector.

South African farmer Hannes Haasbroek flew home from an agriculture conference in the United States six years ago, inspired by the novel and potentially lucrative idea of distilling maize into bioethanol fuel for vehicles. Haasbroek's friends laughed at him; some called it a crazy idea. But in little more than a year, South Africa's first billion-dollar ethanol factory will be pumping out 500,000 litres of the liquid fuel every day. Seven more of the enormous factories are planned for sites across the country. "Sure they thought it was an idea that wouldn't work - they didn't understand it. But since the price of oil has gone up by so much, and ethanol is in higher demand, many farmers I've talked to want to do exactly what I'm doing," Haasbroek said with a smile.

The fertile fields that appear to stretch unbroken across Free State Province, South Africa's heartland and breadbasket, may well prove the epicentre of an economic revolution as significant as the discovery of gold and diamonds more than 100 years earlier. The plan is deceptively simple: turn food into fuel. Bioethanol is an alcohol refined from almost any starch crop humans eat - maize, sugar cane, beetroot, wheat - and is championed by supporters as both an environmental and economic panacea to the world's dependence on fast-disappearing fossil fuels. Ethanol emits much less carbon dioxide (CO2) gas than regular gasoline, is cheaper to buy and, unlike oil or coal, is a renewable source of energy: simply plant more of it if you run out.

World ethanol production has rocketed from about 550 million litres a year in 1975 to more than 30 billion annually, and though Africa is a latecomer to the biofuel party, it hopes to make a big splash when it finally arrives. "Africans have the potential to become the Arabs of the biofuel industry," said Johan Hoffman, chief executive of Ethanol Africa, the company that plans to build eight biofuel factories across South Africa. "There is a potential to use vast areas of this massive continent for biofuel production, and all that is needed is water and an electricity supply," Hoffman said. "Africa has the potential to provide energy for the world - who is going to supply the growing economies of China and India? We already know there is a finite amount of oil left in the earth, and it is being used in enormous quantities and will soon be gone".

While ethanol might be the tonic that quenches the world's thirst for energy, it also holds the promise of bettering the lives of thousands of poor, rural Africans by providing farm and factory jobs, and ensuring a steady market for maize, sugar and other commodities:
:: :: :: :: :: :: :: ::

"The [South African] government wants to create jobs in rural areas and redistribute land from white to black farmers, and bioethanol production could be the solution to both problems," Hoffman said. "Bioethanol will create jobs, not just for the farming industry, but for whole communities, and uplift the poor."

With unemployment estimated at 40 percent and a farming industry that could theoretically triple in size from 1.5 million to 4.5 million hectares, South Africa could be the ideal environment for a vast bioethanol industry.

Ethanol Africa, which will list on a British stock exchange in November, said it hoped to source 30 percent of its maize from small-scale farmers and buy whatever they brought for sale - a tonne, a half-tonne, or even a single bag - at prices set before the planting season, ensuring a steady income for farmers.

The company, formed by a group of farmers and agronomists, is already exploring the possibility of building ethanol factories in countries like Angola and Zambia.

Those touting the benefits of bioethanol also claim the fuel is a boon to the environment.

Since the signing of the Kyoto accord on greenhouse gases and global warming, many countries have begun programmes to blend ethanol into gasoline - known as 'gasohol' - in an effort to reduce the amount of CO2 released into the atmosphere.

The mandatory ethanol content for any gasoline is 20 percent in Brazil; the European Union recently introduced a mandatory 5 percent level, and Sweden boasts the world's biggest ethanol bus fleet.

In South Africa, which imports about 60 percent of its crude oil requirements, ministers are discussing the introduction of a 10 percent mandatory ethanol blend.

"The reason for blending ethanol is not only about the high price of oil, but the world also wants environmentally friendly solutions to the problems of energy use, and ethanol releases about 60 percent less CO2 than petrol," Hoffman said.

A renewable energy that will create jobs, reduce dependence on fossil fuels, help the environment and uplift the poor - is there anything ethanol can't do?

A lot, say its detractors. "I wish they would stop building these ethanol factories," said the University of Cape Town's Dr Harro Von Blottnitz, a chemical engineer who has spent years studying biofuels in African contexts.

"It is well documented - it takes energy to make energy, and the amount of energy it takes to grow and harvest these crops barely produces a surplus return," he said. "While bioethanol production makes some sense with high oil prices, I don't think our government has wrapped its mind around all the consequences, and studies that should be done, haven't been done."

Scientific debate rages around the process and results of transforming food into fuel, with many saying the numbers simply don't add up.

Ethanol distilled from sugar gives a decent energy return, but add up all the energy it takes to grow a field of maize, and the amount you get back is barely more than you put in, critics say. Besides that, biofuel is much less efficient than regular fuel, so even if it is cheaper to buy, it will not move your vehicle nearly as far.

Von Blottnitz uses the example of solar panels to demonstrate a more efficient way of obtaining energy. "Instead of planting maize on a hectare of land and making ethanol from that maize, if you laid the field with photovoltaic panels you would obtain 200 times the amount of energy in the form of solar energy," he said.

How much maize is needed to move a car, a truck, or a fleet of buses? A hectare of land - 1 sq.km or about the size of two football fields - yields an average of 4 tonnes of maize. Each tonne of maize can be distilled into 420 litres of bioethanol, plus some ancillary products. The two football fields would thus produce about 1,680 litres of ethanol.

According to a report in the Washington Post newspaper, the entire American maize crop would provide enough ethanol fuel to replace only about 12 percent of the country's gasoline requirements.

"The grain required to fill a 25-gallon (about 114 litres) SUV [sports utility vehicle] gas tank with ethanol will feed one person for a year," said Lester Brown of the Earth Policy Institute in a statement. "The grain it takes to fill the tank every two weeks over a year will feed 26 people ... The 55 million tons (about 50 million tonnes) of US corn going into ethanol this year represent nearly one-sixth of the country's grain harvest, but will supply only 3 percent of its automotive fuel."

While some bristle at the idea of the poor and hungry competing with luxury all-terrain vehicles for the world's supply of grain, Ethanol Africa says it will use only yellow maize in its factories, and not the white maize favoured by consumers.

Environmentalists, who have resisted blindly embracing bioethanol as a viable answer to energy supplies, have raised other concerns. Biowatch South Africa, an NGO concerned with food security and promoting organic farming methods, reels at the bioethanol industry's dependence on genetically modified (GM) crops in South Africa.

"Small-scale farmers are adopting GM crops, and once they do they become dependent on the markets and forget about their own food security," said Biowatch Director Leslie Liddell. "By and large, those farmers don't understand the contracts they sign with multinationals supplying the seeds. They are not allowed to replant the seeds because of copyright laws. These companies are beginning to own our agricultural systems, and farmers are no longer storing their seeds."

In the small town of Bothaville in South Africa's Free State province, the foundations for the country's first bioethanol factory are being laid on a sprawling 30-hectare site, with the full backing of local government. Production is expected to begin in about a year.

"The whole bioethanol revolution will save maize farmers in South Africa," farmer Haasbroek said. "Because if it wasn't for this technology many thousands would go bankrupt, many would give up farming altogether."


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Renewables becoming cost-competitive with fossil fuels in the U.S.

Quicknote bioenergy economics
For Biopact, it is crucial to follow up on the development of the renewable energy market in both the US and the EU, the world's largest energy consumers. These markets might become the place where African energy farmers can sell their green products in the future. A joint report released today by the Worldwatch Institute and the Center for American Progress, entitled "American Energy: The Renewable Path to Energy Security" [*.pdf], gives us an overview of the current state of affairs in the US. There, renewable resources currently provide just over 6 percent of total US energy, but that figure could increase rapidly in the years ahead.

Interestingly, the report notes, many of the new technologies that harness renewables are, or soon will be, economically competitive with fossil fuels. Dynamic growth rates are driving down costs and spurring rapid advances in technologies. Since 2000, global wind energy generation has more than tripled; solar cell production has risen six-fold; production of fuel ethanol from crops have more than doubled; and biodiesel production has expanded nearly four-fold. Annual global investment in "new" renewable energy has risen almost six-fold since 1995, with cumulative investment over this period nearly $180 billion.

"With oil prices soaring, the security risks of petroleum dependence growing, and the environmental costs of today's fuels becoming more apparent, the country faces compelling reasons to put these technologies to use on a larger scale," notes the report. Some of the findings include:
  • America boasts some of the world's best renewable energy resources, which have the potential to meet a rising and significant share of the nation's energy demand. For example, one-fourth of U.S. land area has winds powerful enough to generate electricity as cheaply as natural gas and coal, and the solar resources of just seven southwest states could provide 10 times the current electric generating capacity.
  • All but four U.S. states now have incentives in place to promote renewable energy, while more than a dozen have enacted new renewable energy laws in the past few years, and four states strengthened their targets in 2005.
  • California gets 31 percent of its electricity from renewable resources; 12 percent of this comes from non-hydro sources such as wind and geothermal energy.
  • Texas now has the country's largest collection of wind generators. The United States led the world in wind energy installations in 2005.
  • Iowa produces enough ethanol that, if consumed in-state, would meet half the state's gasoline requirements.
  • Renewable energy creates more jobs per unit of energy produced and per dollar spent than fossil fuel technologies do.
Despite strong public support and rapidly rising interest in renewable technologies, the U.S. has not kept up with the rapid growth in the sector globally over the past decade. If the U.S. is to join the world leaders in renewable energy—among them Germany, Spain, and Japan—it will need world-class energy policies based on a sustained and consistent policy framework at the local, state, and national levels [entry ends here].
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Cellulosic ethanol investments in China growing rapidly

A series of newsbits shows that cellulosic ethanol is making headway in China, fast. The rising superpower's cars might be running on biofuels made from straw, sooner rather than later. China's agricultural and forestry sector produces vast amounts of biomass 'waste' each year, and companies are looking into turning this resource into renewable fuels. In an earlier post we referred to German technology that has raised the interest of Chinese officials, because it allows the country's huge mass of rice-straw to be converted into liquid fuels. Last year, China produced some 190 million tons of rice, which results in roughly the same amount of waste rice-straw (the actual 'residue-to-product' ratio for rice-straw varies between 0.5 to 4). In theory, this biomass resource alone could yield up to 70 million tons of liquid biofuel per year, roughly 1 million barrels of oil equivalent per day. In short, the potential is impressive. But the hurdles to take are equally great.

Let us have a look at the investments and technology steps that are underway in China. On August 28, an enterprise in Henan Province declared that it would invest 50 million Yuan RMB (€5mio/US$6.3mio) in building first pilot straw-ethanol plant with a capacity of 3000 tons. The company hopes to complete the project and to get the plant up and running in the fist half of next year.
Secondly, on August 30, an enterprise in Shandong Province pushed forward a new enzyme and bioconversion process for the fermentaion of ethanol. Its industrialization model was endorsed and approved by the experts from Chinese Academy of Science. This project, also with a capacity of 3000 tons, is claimed to be the first one in China to have actually realized the production of fuel-grade ethanol from straw.
Thirdly, an oversized state-owned enterprise announced that it would be investing 'a large sum of money' in the biomass-to-liquids industry. This enterprise is targetting a capacity 3 million tons of fuel ethanol by the end of the 11th Five-year Plan period. It considers its most attractive investment to be, once again in producing ethanol from biomass waste, in particular straw. The state-owned company is cooperating with Denmark and the technology for producing cellulosic ethanol is ready to be transferred to China.

China is moving away from using food crops as feedstocks for biofuels. It is a prerequisite if China wants to achieve its stated goals. First, insiders say that the country is already producing 5 million tons of ethanol, five times more than the official figures. Under the 11th Plan, another 5 million tons capacity will have been built by the end of the 2010. Now if this entire production were to be based on food crops as feedstocks (maize, wheat, grain sorghum, cassava), then pressures on food prices might arise. Rice-straw and other biomass residues would make the ideal substitute raw material.

But is cellulosic ethanol really a solution? How far has the technology progressed, and is it really cost effective yet? He Zhenhong, journalist for the Chinese Economic Times, has an overview of the current situation in the country, and offers some nuanced answers:
:: :: :: :: :: :: :: ::

We quote from his article When could straw-ethanol fuel our cars?

Firstly, we have to take the technology and the industrialization ability into consideration. The main ingredients of the straw are cellulose, hemicellulose, and lignose. The key technology to produce ethanol with straw is the hydrolysis technology of cellulose and hemicellulose and the gene engineering bacilli that can metabolize pentose. It is reported that several enterprises declared that they had mastered the technique of producing straw ethanol and have produced some samples. Some even said that they had built industrialized product lines. No matter how these enterprises preach, one indispensable detail is that among enterprises carrying out straw ethanol experiments, pilot scale experiment only has a capacity of 300 tons at most, and the product line currently being built has a capacity of 3000 tons at most. It can be only regarded as big-scaled pilot scale experiment and is far from industrialization.

Cost is the second factor that we need to consider. The cost of producing ethanol with maize is relatively high. Some pointed factories disclose that maize accounts for 70% of the whole raw materials used to produce fuel ethanol. But the reporter has learned, in order to popularize fuel ethanol, our country has subsidized the pointed factories by the standard of over 1000 Yuan per ton. Theoretically speaking, the price of straw is much lower than that of maize. The cost of producing ethanol with straw will definitely be lower. But under the condition that big-scaled industrialization of straw ethanol has not been completed, the economic efficiency will accordingly decrease. The enterprises, who are carrying out experiments on straw ethanol production, said that 6 tons of straw could produce one ton ethanol. But the cost will be equal to the maize ethanol until the 11th Five-Year Plan period.

Therefore, the rational conclusion should be that we have obtained the technology of producing straw ethanol, but we still have to solve problems in industrialization and cost. In this case, the right choice should be that those powerful big-scaled enterprises cooperate with scientific research institutes to carry out pilot scale experiments. Then utilize the optimized index, carry out industrialization experiment, and finally only after the experiment is proved successful, can it be popularized completely. When doing so, the backup is capital. Therefore, some relevant people appeal that we should lower the doorsill of bank loan to those enterprises who are carrying out straw ethanol test, loosen the refinancing terms in the capital market, and offer favorable consideration on special fund for national major projects.

How far is the straw ethanol from us? For every enterprise and place that has an impulsion in straw ethanol, this question should become one that has to be clarified.

Entry ends here.

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Biomass-to-liquids: bring the factory to the forest, not the forest to the factory

The availability of huge residue biomass streams that result from forestry, agroforestry and horticultural activities is rapidly becoming a major source of energy. In India, Dr SS Verma of the Sant Longowal Institute of Engineering and Technology is developing a new bioconversion concept to transform this bulky biomass into fuels in an efficient manner. By bringing the factory to the forest, instead of the forest to the factory, 'biomass-to-liquids' production becomes much more economical.

Woody waste consisting of loggings, chips, leaves, plant residues, and cuttings is known as "slash". Piles of such slash are becoming a common sight everywhere near plantations and in cities and towns all over India. No doubt forests and plantations are the need of the hour in order to combat dangerous climate change. But safe disposal of slash is turning to be a problem.

Earlier, this waste was consumed or managed judiciously by the owners who used it as a biofuel for cooking or as animal fodder or building materials. But the changing life-styles of people not only in cities but more and more in villages as well, creates a situation where nobody any longer make use of these biomass waste streams in an efficient manner. To the extreme, in some parts of India farmers are simply burning the agricultural crop residues which creates air pollution and even changes regional climatic patterns (fine sooth particles in the atmosphere contributing to 'global dimming', and affecting monsoon patterns), and most notably contributes to global warming via CO2 emissions.

Treatment of woody plant residues created during forestry, agroforestry and horticultural activities is also important to achieve other environmental objectives like reducing the risk of the spread of harmful insects and diseases, protecting and maintaining air quality by reducing the risk of wildfires and forest fires, improving access to forage for grazing and browsing animals, enhancing aesthetics, improving soil organic matter, improving sites for natural or artificial regeneration and so on.

Green factories in the forest
Current slash treatment methods do not achieve these objectives and do not protect land and water resources. The problem has been that forest slash is bulky, low-density biomass material usually located in remote logging areas. This abundant, essentially free biofuel feedstock is too expensive to collect and transport particularly if the nearest refinery is more than 100 kilomtres away. It doesn't take long before the cost of trucking exceeds the value of the biomass. But now there is a new and easy to understand concept being developed to overcome this problem:
:: :: :: :: :: :: :: :: ::

Advanced biorefinery concepts simply flip the problem on its head by taking the machine to the biomass as opposed to the biomass to the machine. A portable plant might make it economical to transform huge amounts of logging "waste" into a usable form of energy--right in the forest. Several companies, amongst them a Canadian and most notably a German consortium of companies and research institutes have developed an economical way of turning slash into a carbon-neutral liquid fuels for power generation and chemical production. Their approach is built around a modular, quick-to-assemble fast-pyrolysis plant that can follow logging companies into the bush and directly convert their leftover trimmings into clean-burning renewable bio-oil, which can be used as a heavy fuel oil in forestry machinery or the high density can be transported economically to a more centralised bio-refinery, where it becomes the feedstock for a whole series of bio-materials, green specialty chemicals and liquid fuels.

This biomass conversion technology is also referred to as "Dry Distillation" and was widely used during World War II as a source of acetic acid, acetone, and wood alcohol. Dry distillation is a process whereby the molecular structure making up the biomass is shattered in an oxygen reduced environment. Three products are produced – liquid (distillate), charcoal (char) and gas. The relative proportions of each product depends on process conditions. For example slow heating of biomass produces more charcoal and less liquid. Higher temperatures produce more gas.

The most advanced plants use a high density, hot, steel shot as a heat carrier to rapidly transfer energy to the incoming biomass. The reaction is virtually instantaneous and hot vapours are quickly removed from the reactor and condensed. The primary target product is the liquid condensed from the hot vapours. The process is somewhat similar to evaporating water and then cooling and condensing the vapour, hence the term, "dry distillation". The difference between water and biomass distillation is that the molecular structure of the biomass is permanently altered.

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Africa emerges as China and India's 'New Frontier'

Chinese and Indian firms are increasingly doing business in Sub-Saharan Africa, and their interest in the continent extends well beyond a hunt for natural resources, a new World Bank study says. With the increasing economic ties come cultural and social influence.

Exports from Africa to Asia tripled in the last five years, making Asia Africa's third largest trading partner (27 percent) after the European Union (32 percent) and the United States (29 percent), according to Africa's Silk Road: China and India's New Economic Frontier.

Indian and Chinese foreign direct investment also grew, with China's amounting to $US1.18 billion by mid-2006, notes the study. Africa's Silk Road offers original firm-level data on the African continent of Chinese and Indian firms operating there, says the study's author, Bank Economic Adviser Harry Broadman. Broadman surveyed 450 Chinese and Indian companies operating in four African countries-South Africa, Tanzania, Ghana, and Senegal—and developed first-time business case studies in the field of 16 other Chinese and Indian firms in Africa.

The new data suggest Asian firms are beginning to diversify beyond oil and natural resources into a broad array of industries — a trend that could lead to more sophisticated products being produced in Africa and help Africa more fully participate in world commerce, Broadman says.

"To be sure, if you take a snapshot of today, the overwhelming bulk of Africa's exports to Asia is natural resources," says Broadman. "But what's new is there is far more than oil that is being invested in-and this is an important opportunity for Africa's growth and reduction of poverty because Africa's trade for many years has been concentrated in primary commodities and natural resources."

Released on the eve of the International Monetary Fund-World Bank Annual Meetings in Singapore, the study comes as world leaders gather to address a host of pressing development issues, many affecting Africa and its 300 million poor.

It also comes at a time when many are hailing progress in Asia that has lifted some 400 million out of extreme poverty in the last 25 years. Many wonder if the same "miracle" can occur in Sub-Saharan Africa and Latin America.

While growing Asian trade and investment is cause for optimism, Broadman cautions that there are major asymmetries in the economic relations between the two regions. China and India's comparatively high tariffs on Africa's leading—and highest value—exports prevent Africa from fully tapping into these markets. Africa's exports account for only 1.6 percent of what Asia receives from the rest of the world.

South-South Trade

"Skyrocketing" Asian trade and investment in Africa represents the beginning of a change in trade patterns, Broadman says. Today most trade is still North-South, between Africa and developed nations in Europe, Japan, or North America.

Africa's exports to Asia grew at a 20 percent annual rate in the last five years, and has accelerated to 30 percent since 2003.

"But what's going on in China, India, and Africa is part of the broader trend in the world of rapidly growing South-South investment and trade-trade among developing countries," says Broadman. Trade with Asia is producing goods affordable to Africans, Indians, and Chinese, that are either being sold in Africa or exported to China, India or a third country:
:: :: :: :: :: :: :: :: ::

At the same time, more and more Chinese and Indian firms are seeking to manufacture and export sophisticated components, such as those produced by the South African auto parts industry, to the global market.

"This is allowing Africa for the first time to enter into this network of more sophisticated third-country global exports," Broadman says.

But the study indicates that the conventional remedy of reduced trade barriers will not be enough. More important are "behind-the-border" reforms to encourage competition, strengthen market institutions and improve governance in African nations, and "between-the-border" reforms in both regions, to reduce international transactions costs.

"Part of what the Africans need to do to attract China is reduce the cost of doing business," says John Page, Chief Economist of the Bank's Africa region.

Some countries are already moving in that direction, according to the recently released World Bank Group's 2007 Doing Business survey, which found that the business climate in several African countries improved in 2005 and that Sub-Saharan Africa was the third best reforming region, after Eastern Europe and Central Asia, and Organization for Economic Cooperation and Development (OECD) (high income) countries.

About a third of Africa's population lives in countries where population growth outstrips economic growth and where the economy is actually regressing, Page says.

But he says prospects are good in about 14 countries that are home to 65 percent of Africans. About 30 percent live in natural resource exporting countries, and another 35 percent live in countries that have been growing at an average rate of 5 percent a year for the last 10 years.

Many countries could greatly benefit from as yet untapped South-South trade opportunities, such as tourism aimed at China, Eastern Europe, Latin America, and the former Soviet Union, says Broadman.

"The tourism industry in Africa is underdeveloped. It's just a huge market waiting to happen," he says.

But what is needed is something Africa lacks: infrastructure—roads, airports, transit systems, and telecommunications, he adds.

It's a deficiency keenly felt by Africa's trading partners. China, for one, is looking for opportunities to contribute to the Bank's work in Africa, including infrastructure projects, says Page.

And the Bank may partner with China and India, particularly on agricultural projects, to tap into their specialized knowledge, Page says.

In fact, knowledge may end up being India's and China's greatest gift to Africa, he says.

"The knowledge that can be conveyed between Asia and Africa may turn out to be as important or more important than the trade and investment flows themselves," says Page.

Indeed, as Broadman notes, "African-Asian trade and investment constitute a very small part of the solution to the challenges Africa faces, such as lack of infrastructure and not enough highly skilled workers. Overcoming these barriers to economic growth and development may well take decades to overcome."

More information:
Workld Bank: Africa Emerges as China and India’s New Economic Frontier -- Africa-Asia trade triples in five years - sept. 16, 2006.

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Benin rural electrification program gives green light to biogas

Benin's Centre Songhai in Porto-Novo is specialized in offering courses about sustainable agriculture to local farmers, while doing research on appropriate rural renewable technologies. It is here that Raymond Ahinon, a technician at the centre, is experimenting with biogas which, he thinks, will 'conquer' the African country soon because it can provide electricity, lighting and gas for cooking to rural households in a decentralized and affordable manner. The smallest biogas systems he's working with can provide energy for 8 persons - the average household size in the country. And exactly one such family in rural Benin produces enough biodegradable matter to satisfy its own energy needs.
The technology Ahinon is working with (premixing chambers, digesters, effluent discharge ponds, storage tanks) comes from China, where 10 million such small units already exist.

Ahinon sums up the advantages of decentralised biogas plants for his country:
  • biogas is a very affordable energy solution both in rural areas as well as in small towns, where enough biodegradable waste is available from households
  • biogas digesters can play a role in the 'sanitary education' ('éducation sanitaire') of rural households, who often find it difficult to dispose of their waste-streams in an appropriate way
  • biogas plants can be installed in regions where the national grid will never come; in towns where grid-electricity is available, it is cheaper than the electricity offered by the SBEE (national utility)
  • unlike other gas types used by households, such as propane and butane, biogas poses no risk of explosion because if the small digester unit's storage tank is full, the excess gas that builds up, simply escapes
  • biogas is climate-neutral
Biogas systems make an excellent technology to bring energy to rural areas and on a small, local scale. The advice of the Centre Songhai is therefor taken up by the `Agence béninoise d`électrification rurale et de maîtrise d`énergie' (ABERME) (Beninese agency for rural electrification) whose mission it is to cover the entirety of the Beninese territory over the coming two decades, giving priority to locations that are far out of reach of the grid.

But Benin is thinking bigger. Like many 'non oil and gas producing countries' in Africa, the country is dependent on outside forces for its energy. In this case, neighboring Nigeria is in control, with Benin importing natural gas to power the upper classes of its society and its industries. Supply disruptions have lead to frequent blackouts and forced rationing, with the government openly speaking of an energy crisis:

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The Beninese government was forced to invest in big diesel generators to back up the electricity from the natural gas plants. But they don't come close to offering enough, and this rudimentary back up strategy still keeps the country dependent on imported fossil fuel (diesel), says Raoufou Badarou, Director-General of the ministry of energy. Benin is therefor looking at producing its own biogas on a grand scale, and to introduce it directly into the urban natural gas networks. First estimates show that the country could substantially cut its energy bill, and prevent the most damaging effects of current supply disruptions.

In Benin, biomass is primarily used as an energy source in households for cooking and heating, but a vaste waste-stream exists in the industry and agro-alimentary sectors (with Benin's most productive sectors being the production of cassava flour, palm oil, soap, alcohol and ethanol, bread and dried fish). Tapping this waste-stream could relieve Benin of much of its current energy worries.

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