Green Fuel misses targets

THE multi-million dollar Chisumbanje ethanol project, Green Fuel, has missed its ambitious investment targets, which projected an injection of approximately US$2,2 billion by this year.


So far, only over US$260 million has been invested in the company, which has temporarily shut down its plant due to the heavy rains, that have made its sugarcane plantations inaccessible.
According to an investment blueprint by the company seen by the Financial Gazette’s Companies & Markets (C&M), Green Fuel planned to undertake a number of critical projects over a 12 year period, which commenced in 2008. The period is split into four phases.
The investment blueprint indicates that the ethanol project is supposed to be in its fourth and final phase running between 2017 and 2020. Under this phase, the investment blueprint had projected Green Fuel to be producing 450 million of ethanol per annum, and to have increased the fuel blending threshold to E20 and voluntary blending support to E85.
This was projected to save the country of US$12 million in fuel imports per month and generating up to US$25 million per month in ethanol exports.
Green Fuel had targeted to have over 45 000 hectares under its sugarcane plantation, 4 500 hectares of irrigation schemes developed for small-scale farmers feeding over 18 000 families and employing 30 000 workers as explicitly outlined in its investment blueprint issued in 2013.
However, investigations by C&M gathered that the company had missed the set targets.
C&M gathered that Green Fuel only produced a paltry 38,6 million litres of ethanol last year, which is 85 percent lower than the targeted output. This is even way below the 120 million litres annual production previously reached during the project’s initial stages (Phase One) between 2008 and 2013.
This has forced government to revise the ethanol blending ratio downwards to E5 as the producer has been unable to meet demand.
It further emerged that Green Fuel supplied a mere 14,7GWhs of power to the national grid last year against the targeted 40MW.
This comes at a time the plant is expected to be generating 86MW between now and 2020.
Moreover, no power is currently being generated at Condo Dam at a time it was earmarked to be producing 40MW between 2014 and 2017 (Phase Three B) under the company’s investment plan.
The company, which planned to employ a total of 30 000 people between this year and 2020, currently has a workforce of 4 500 people, which is even less than the 5 500 workers it had targeted to employ during its inception.
The huge misses are a clear indication that all is not well at the Chisumbanje ethanol plant.
Green Fuel officials were reluctant to shed light on their operations when contacted for comment.
Green Fuel’s community social responsibility officer, Rafael Zuze, referred questions to Nicole Rautenbach, who acknowledged to have received emailed questions sent three weeks ago.
Rautenbach said last week that she was seeking responses from the company’s top management.
“I’ve seen your email. I’m just looking to see if I can get some responses. We have shut down at the moment and things are a little bit slow but I will get back to you if I can get some responses from management,” she said.
Further attempts to get details from the Agricultural and Rural Development Authority (ARDA) chairperson, Basil Nyabadza, were fruitless as he could only comment on matters to do with Arda as an entity.
ARDA represents the State in its partnership with private players in Green Fuel, Macdom and Rating Investment owned by business tycoon Billy Rautenbach. The Zimbabwe Regulatory Authority (ZERA) said its records for ethanol production at Green Fuel in 2016 showed that the company had produced a total of 38,6 million litres.
“Based on our records Green Fuel generated and supplied 14,7GWhs of power in 2016. And there is currently no power generation at the said site,” ZERA said in emailed responses to questions.
ZERA further indicated that Energy Minister, Samuel Undenge, had been forced to revise downwards the ethanol blending ratio to five percent (E5) due to inadequate supplies.
Green Fuel’s official website, which appears to have been last updated in 2015, indicated that “approximately 1 200 hectares of land have been developed for the community to date.”
A further 18 existing small scale irrigation schemes, stretching 1700 hectares from Mutema and Tawona to Chibuwe, cater for approximately 2 300 farmers, it said.
However, though the efforts are commendable, they are still way below the current target of 4 500 hectares of irrigation land meant to benefit over 18 000 families.
The website also indicates that only 4 500 workers are currently employed against the projected 30 000, with only US$260 million injected against a targeted investment totalling US$2,2 billion.

 

Source: The Financial Gazette: March 9, 2017

Post Author: Muaz Cisse

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