Ekiti, Global Biofuels sign pact on N9.7b ethanol project….As Country to Benefit From U.S. $70 Billion CDM Funds…

No Comments » April 1st, 2008 posted by // Categories: Energy Development Project




Tuesday, April 01, 2008              

Ekiti, Global Biofuels sign pact on N9.7b ethanol project
By Sulaimon Salau

THE quest for development of biofuel energy in the country received a boost recently as Ekiti State government signed a Memorandum of Understanding (MoU) with Global Biofuels Limited to construct an ethanol-processing refinery in the state.

The project, which is about the second in the country, is expected to gulp about $83 million (N9.7 billion), and billed to generate employment for about 58,000 people in the state.

The Nigerian National Petroleum Corporation (NNPC) introduced the production of ethanol fuel in 2006, with the main motive of making fuel more affordable for Nigerians and also diversifies the economy from oil and gas reliance to agricultural based.

Initially, the country is targeting E-10 by 2010, meaning that 10 per cent of ethanol would be mixed with 90 per cent petrol to fuel vehicle and industrial uses. Apart from having privilege to cheap and clean fuel, the project is bound to reduce global warming.

The Managing Director of Global Biofuel, Mr. Felix Obada, at the signing ceremony in Ekiti State Government House recently, assured that the project would turnaround the economy of the state, and position Nigeria to benefit from the global Clean Development Mechanism (CDM) fund, as it would reduce the nation’s carbon emission.

His words: “Sometimes November 2007, we submitted a proposal on this project and we were well received, we therefore set up an implementation team, I am happy to report that today the team has performed so well that we are signing the project today. We have been talking to seven states on this project and the response from some of them has been encouraging, but today you are in the number two position.

“We submitted our drafted MoU barely two months ago and today we are signing it. The project fuel ethanol can be generated through several feedstocks, but our own feedstock is sweet sorghum, and it is unique. We have identified areas in the northern part of the Ekiti State where this agricultural product will do very well.”

Obada pointed out important deliverables through the project such as, generation of electricity from the project, production of ethanol for industrial and transport usage. The company plans to generate 17.5 mw for the project and utilise 3.5 mw for the community.

On financing of the project, he explained that the co-investors would raise $23 million at initial stage and further get a loan of $60 million, which will be total of about $83 million.

According to him, the company has engaged some Japanese and Canadian companies as core investors in the project to ensure a more standardised production process.

The project is expected to be sited at Ilemesho community of Ekiti State projected to produce 20,000 metric tones of ethanol daily. It plans to commence planting of the sorghum on 5,000 hectares of land.

Besides, he assured that, “Global Biofuel will fast track the processes and start construction within the next three months, and another 21 months we will be commissioning the ethanol refinery plant here in Ekiti State.”

Governor Olusegun Oni of Ekiti State acknowledged the gesture of the company to extend such a viable project to the state.

He described the development as part of the move by the state government to make the state one of the most vibrant economies in the continent.

His words: “I want to say that today is indeed another step forward for us as people of Ekiti State towards the journey to make the state a highly productive and industrialised economy and indeed as one of the most vibrant economies in the African continent.

“We welcome what is happening today because we can see it as one of the industries of the future, the moment they came with the concept of ethanol from sweet sorghum, we know that this is a good mind against the future, because weather we like it or not the world must go greener, and in the process of going greener, biofuel would become much more prominent and therefore the production of biofuel will become more profitable. We therefore want to be associated with it now, and be associated with industrialisation which we believe will propel the global initiative to make the continent and the planet as a whole more sustainable in the long run.”

Oni explained that to ensure the smooth operation of the project, his administration is already constructing two link roads to Ilemesho where the project will be cited. Also plans are in the pipeline to build two boreholes for the community in the interim.

The agreement was signed by the Commissioner for Agriculture and Natural Resources, Mr. Akin Omotayo, on behalf of the state, while Obada signed for Global Fuel.


Country to Benefit From U.S. $70 Billion CDM Funds

This Day (Lagos)

31 March 2008
Posted to the web 31 March 2008

By Udeme Clement-Ogbuanu

In line with the Nigerian National Petroleum Corporation (NNPC) initiative to work with investors in achieving ethanol production in Nigeria, the Managing Director and Chief Executive Officer, Global Biofuels Limited, Dr. Felix Babatunde Obada, has disclosed that Nigeria would benefit from the $70billion Clean Development Mechanism (CDM) funds with the development of ethanol local capacity in the country.

He made this disclosure in an interview with THISDAY, at the official signing of Memorandum of Understanding (MoU), with Ekiti State government on ethanol project in the State over the weekend, saying that CDM which is also known as Carbon Credit, is a scheme put in place by United Nations to make developing countries producing environmentally friendly fuel benefit from the money that developed economies pay for polluting the environment.

Dr. Obada further revealed that Global Biofuels, the company handling ethanol project in Nigeria has entered into partnership agreement with Japanese and Canadian companies experienced in CDM matters as core investors in ethanol project to participate financially and in terms of technology in order to enable Nigeria benefit from CDM fund already traded in European countries.

He added that the project in Ekiti State alone would gulp over $83million to develop a factory for the production of over 200,000 litres of fuel ethanol on daily basis, while 5,000 hectares of land would be developed at a go for planting of sweet sorghum, which is the feeds stocks needed for the production.

“Right now there are over 44,000 companies registered in Europe looking for carbon credits, so we want to qualify all our projects in order to benefit from this scheme because we are not polluters.

We are also interested in companies that would participate right from project conceptualisation to commissioning and operation of the project, he said.

His words: ìCarbon Credit is being traded in the world today and the sad thing is that the developing economies like Nigeria and the whole of West African countries that are not polluters, which ought to benefit from the scheme are not benefiting right now.

Unfortunately there is no African Country yet that has earned a dime from CDM funds because it is traded within the European countries. The polluting countries supposed to come to non-polluting economies and buy Carbon Credit from them, but because we do not have the industries running we cannot gain anything from it.

So, once our industries begin to sell Carbon Credit, Nigeria would benefit and our banks would set up Carbon Credit desks to trade with the developed economies because the price is rising, it started with $5 and now is about $13 meaning that the price is increasing by the dayî.

He explained that it is not every biofuel ethanol project that would qualify for CDM. I don’t want to mention any project that would not qualify for CDM, but though sweet sorghum as feeds stock is good and on it own as green filament would absorb carbon dioxide from the air, it would automatically qualify, but we must package the project in a way that could qualify so that we can issue Carbon Credit and sell it.

We have done thorough inspection on our site because we started discussion for this project in Ekiti State six months a go when we held the first meeting with the Governor and he set up a team to work with us, where we went right into the bush and we have surveyed the land and paid compensation to the land owners, so everything is in place for smooth takeoff of the project in the State, he maintained.


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