Eradication of Poverty with the Launch of the Bio-Fuel Investment Opportunity in Mozambique

by Johan Horak

Mozambique Government’s objective is to eradicate poverty through private enterprise with the launch of a bio-fuel project. The launch took place on Thursday, 23 February 2006, at the Joaquim Chissano Conference Centre in Maputo. The Mozambican Government provided 3,5 million hectares of land for this development. In seven of the ten provinces are 500 000 ha per province available. The Mozambican Minister of Energy, Salvador Namburete, the Vice-Minister of Agricultural, Caterina Pajurie, representatives of other departments, ambassadors and representatives of financial institutions such as the World Bank as well as representatives of Petromoc attended the ceremony.Mr Altie Steenkamp, CEO of Mozambique Bio-Fuel Industries Lda (MBFI), discussed the project as an investment opportunity that will directly and indirectly help to eradicate poverty. These investors will cultivate the crops for bio-diesel and bio-ethanol production. Investor will participate in the bio-fuel commodity that is a worldwide demand today. The investor will share in the total production income of all the products and by-products such as glycerine, bioelectricity, organic fertilizer, ethanol gel, and carbon credits. Long-term off-take agreements guarantee the market. He stressed further that this is a good opportunity for farmers and businesspersons to become part of this prestigious development and the creation of wealth for investor and Mozambicans. Dr Bernardo Ferraz, Director of Mozambique Bio-Fuel Industries, discussed the socio-economic impact of the project on Mozambique and the development of the rural agricultural sector. The Mozambican small-scale farmer will participate in the cultivation of raw material, Jatropha and Cassava, for the production of the bio-fuels. This way the rural substance farmer, who knows Cassava well, will share in the economic benefits that this project have for the local Mozambican population.Mr Johan van den Berg of CDM Africa explained how the large tree plantations will effect the atmosphere; he also explained the benefits of carbon credits and the economic impact thereof for the investor and the Mozambican farmer. About 2 500 Jatropha trees will be established per hectare.The Vic-Minister of Agricultural, Ms Caterina Pajurie, congratulated Mozambique Bio-Fuel Industries with the initiative that lead to this project and the importance for Mozambique. The Mozambican Government supports the venture that joins in the poverty eradication program of the government. The Government also welcomes agricultural development and investors.Mozambique Bio-Fuel Industries will support investors with the total administration process, the registration of his company, work permits and occupation rights and concession on the land. The Government provides support to streamline this process.Agricultural units are available in seven of the ten provinces of Mozambique and investors can choose where they would like to settle themselves. The investor can visit Mozambique to identify farms as from 1 March 2006. Mozambique Bio-Fuel Industries is in a process to establish a national infrastructure for the production of bio-fuel in Mozambique. The administration process for a unit will take two months from registration, as investor up to occupation rights on land. Farming units of 1 500, 3 000 and 4 500 hectares are available at 34$US (R6, 50/$) per hectare. This fee includes all costs and processes necessary to obtain the land on a 50-year concession, registration of company, etc.The following provinces are part of this development:ZAMBEZI PROVINCE:Districts MORRUMBULA, PEBANE (on the coast)MANICA PROVINCEDistricts MACHAZE, GURO, TAMBARA (on theZambezi River)NAMPULA PROVINCE:Districts MOSSURIL, MEMBA, NACROA, ERATI, NACALA-A-VEHLA, LALAUA (on the coast)INHAMBANE PROVINCE:Districts MABOTE, FUNHALOURO, PANDA, VILANCULOS, GOVURO (in-land on rivers and onthe coast)GAZA PROVINCE:Districts CHICUALACUALA, MASSANGENA, CHIGUBO, MABALANE (in-landon rivers and on the coast) TETE PROVINCE:Districts CAHORRA BASSA, CHANGARA, MACOE,MACANGA, ZUMBO, MARAVIA (north and south ofthe Cahorra Bassa dam)NIASSA PROVINCE:Districts NIPEPE, METARICA, CUAMBA, MANDIMBA, NGAUMA, LAGO, LICHINGA (in-land and on Lake Malawi and standing rivers)Bio-diesel will be manufactured from the oil pressed form the seed of the Jatropha curcas tree. (Jatropha curcas will become one of the most important sources of oil containing raw material in the world). Jatropha is been cultivated on a large scale in Egypt and India for the manufacturing of bio-diesel. Jatropha is drought resistant, which eliminates risk, it is a non-edible plant, easy to establish, grows relatively fast (20cm in the first month and up to 2,5 m in the first year). The plant produces seeds after one to one and a half year after cultivation and produces for 35 years. The Jatropha tree does not need much fertilizer and rain and can hibernate for three years in severe drought. The rainfall in Mozambique will ensure high crops even in marginal land. Bio-diesel will also be manufactured from the oil palm. These palms will be established as from the second year. This palm produces only after five years, but produces three times higher than the Jatropha. This palm also produces for up to 35 years.Bio-ethanol will be manufactured for Cassava. Cassava is a perennial plant with a high starch content in the roots. It is a tropical shrub growing up one meter. Cassava originates from Brazil and Paraguay and is cultivated as staple food in Africa. Depending on the climate, the plant is grown after 8 months. Five of the 109 Cassava species are found in Mozambique.The investor will also be free to cultivate other agricultural products on excess land. Food security is very important. Many other opportunities will also be open to explore such as tourism, distribution and procurement of household products, engineering works, and tropical fruit cultivation.There is an urgent need to do sustainable agricultural and industrial development in the rural areas of Mozambique where people have a substance lifestyle. This project has the potential to alleviate poverty, to empower the people of Mozambique to become entrepreneurs. The private sector will take hands with international partners to find a workable solution to alleviate poverty and to re-establish dignity. The project consists of joint ventures and partnerships between financial institutions, the commodity off-takers, the investor and the Mozambican citizens. The Mozambican Government is serious about total eradication of poverty. Mozambique will become independent of fuel imports in the near future by producing bio-fuels form renewable sources and establish prosperity for the rural population. MBFI has two priorities in this venture. The first is to settle and support the investor-farmer on the available land in the different provinces. The other is to create the infrastructure and demand for the Mozambique small-scale farmer’s produce and therefore alleviate poverty. This is an unique opportunity, not only for the South African farmers to escape their situation of insecurity caused by land claims and crime aimed against farmers in South Africa, it also gives the international investor an opportunity to invest in Mozambique. It is a high yield opportunity in which the investor will be supported with professional guidance, assistance, knowledge and consultation by the MBFI team.The investor shares in the total income, from the cultivation of the raw material to the trading of the final products and by-products – the investor will benefits in all the value-added products manufactured from the raw material. This makes it a very viable investment. Boards of directors, chosen from the investors in each province will manage the provinces produce. Each province will operate individually for own profits. This is a unique opportunity not only for farmers, but also for businesspersons for whom project management will be undertaken by Mozambique Bio-Fuel Industries. This venture takes place on the doorstep of South Africa and is an opportunity to become part of a sustainable and low risk development in a country where personal safety is guaranteed.The investment is secured by the worldwide MIGA investment security meganism underwritten by the World Bank of which Mozambique is a member. Any investor will also not invest any money until all rights and land concessions are in place.The Mozambican Government knows that poverty eradication is only possible through foreign investment. Therefore the have created the environment for the wealth. Through investors, they will alleviate poverty in Mozambique

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