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Indian firm to develop biofuels in Ethiopia

The government of Ethiopia has joined forces with an Indian firm to develop a biofuel park that could reach up to 100,000 acres and help the African country reduce its oil import dependence

In 2007 the Ethiopian government identified 23.3 million hectares of land (equivalent to 20 per cent of the country) to be put towards biofuels production

An Indian biofuel supply chain company has agreed to create a biofuels project using its own feedstock in Ethiopia as part of goverment plans to help the country ease its dependence on imported crude oil.

Bangalore-based suppliers, VayuGrid this month signed a Memorandum of Understanding to distribute its VayuSap biofuels feedstock, a “high-yield” Pongamia to the East African country.

The project will begin with 2,000 acres and should culminate in a cluster of 100,000 acres under a collaborative model, whereby a local partner brings in land and labour and investors put in capital. VayuGrid will provide the intellectual property (IP) and downstream contracts.

The cluster is expected to create USD 2.5m worth of biofuel investment and is part of a larger government plan to develop a biofuel park in Ethiopia. “This park is a critical step to reduce the country's commitment of 87 per cent of free cash on imported crude while at the same time creating local job opportunities and an ecosystem of value added businesses”, said the company in a statement on 20 November.

"VayuGrid is bringing together local and global businesses that are dependent on crude and looking for ways to hedge against currency fluctuations while ensuring a predictable supply of green energy," said Doug Peterson, VayuGrid’s chief executive.

“Ethiopia was chosen strategically based on the economics and agriculture,” VayuGrid said. “Its large land bank of arid and unproductive land lends itself perfectly to creating a green energy supply base for local and global markets over the next 60 years”.

VayuGrid's IP in Pongamia combines plant technology along with customised practices to ensure economic returns, the company said. The economics are boosted by the fact that management of the biofuel plantations can be carried out by local labour, as it does not call for highly skilled workers, said the company.

During a recent roadshow in Addis Ababa, Doctor Abera Deressa, former state minister for Agriculture, indicated that Pongamia tree products can be an important factor in community development and environmental protection.