Pre-feasibility studies for three South African biofuel projects, each producing 100-million litres a year, show it will cost at least R5,1-billion to develop them, a Minister said on Wednesday.
South Africa unveiled blending ratios for biofuels in 2007, but excluded the country’s staple food maize in a bid to ensure food security and rein in high prices.
However, farmers in Africa’s top maize producer have repeatedly called for a change in policy to allow maize in biofuels production so that energy costs could be lowered and profits improved.
“According to the Industrial Development Corp (IDC), the 300-million litres of bioethanol will require three plants producing about 100-million litres per annum,” Ebrahim Patel, Minister of Economic Development, said in a written reply to Parliamentary questions.
“Each project will cost in the region of R1,7-billion in 2010 terms, (for) capex and working capital,” he said.
The projects are a sugar beet and grain sorghum-to-ethanol project in the Eastern Cape province, a sugarcane-to-ethanol project in Limpopo province and a similar scheme in the top sugar growing region of KwaZulu-Natal province.
Patel said that State-owned development finance agency IDC was investing in ethanol, which needed to be blended with petrol before distribution and use in a normal car.
“The biofuel will therefore be sold to the oil majors or wholesalers who will blend and sell the required volumes,” Patel said.
The IDC plans to produce 300-million litres of biofuels a year by 2016, which equated to 75% of the country’s national biofuels production target of 400-million litres.