World Bank can facilitate Brazilian biofuel technology transfers

The World Bank can help Brazil export its expertise for making sugarcane ethanol to developing countries in Africa and elsewhere, the Bank's vice-president for Latin America thinks. "Brazil sees (sharing technology) as a way of helping to build an ethanol market in the world," Pamela Cox told Reuters in an interview. "As projects come up, we have a private sector arm that can help."

The International Finance Corporation (IFC), an arm of the World Bank that makes loans to private companies, would be the instrument used to stimulate firms into helping spread Brazilian expertise in other developing countries. Cox said Brazil's decades of experience could potentially benefit needy countries all over the world, and the bank could help make it happen. "We can facilitate the transfer of information because development is about knowledge," she said.

To many developing countries, high fossil fuel prices and dependence on foreign energy supplies are extremely damaging to their economies. Least developed countries tend to have a high energy intensity (meaning their economies use more energy to grow than highly developed countries), which makes them highly sensitive to price increases. For this reason, energy security and alternatives to fossil fuels have now become the kernel of new lines of thinking in development economics (for a vivid illustration, see Professor John Mathews' Biofuels Manifesto).

In this context, Brazil's biofuels success is seen by many as a potential model for other countries in the Global South. Its highly efficient technologies and scientific expertise have been generating worldwide excitement since gasoline prices spiked and evidence of global warming became more convincing a few years ago. Assisted by top-agronomists, scientists, and technology leaders, local farmers have been making ethanol from sugar cane in Brazil since the 1970s and their fuel is competitive with gasoline as long as crude prices are trading above US$35-40 per barrel - versus roughly US$65 today:
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Cox said sugar and ethanol could become important exports for African countries such as Ghana, where Brazil's agriculture research agency Embrapa opened an Africa office last year (earlier post). The World Bank already gives extensive assistance to Ghana, she said.

Brazil has already agreed to develop ethanol projects with several countries including China and Japan, and this week state oil company Petrobras signed a joint venture with Italy's Eni to develop biofuel initiatives in Africa, possibly biodiesel projects in Angola and Mozambique.

Ethanol producers are counting on governments around the world to mandate more renewable energy use to create growing demand for the fuel. Cars can be made to run on ethanol mixed with gasoline or on pure ethanol, which is considered renewable because the crops used to make it can be planted again and again. It is also carbon-neutral because the CO2 emissions from cars running on ethanol, are taken back up by the biofuel crops as they grow.