The Inter-American Develop-ment Bank (IDB) yesterday announced the approval of a number of technical cooperation grants totalling US$925,500 or $187.4 million to support Guyana’s bio-energy development plans and to encourage private investment in bio-fuels production.
A release issued by the IDB in Washington said that the funds, to be administered by Guyana’s Ministry of Agriculture, will be used by the Guyana government to promote the development of its nascent bio-energy sector through policy development, training, feasibility studies and incentives for private investment.
“These grants will help the Government of Guyana to turn the country’s extraordinary bio-energy potential into a reality,” the release quoted IDB project team leader for technical cooperation Christiaan Gischler as saying.
New jobs
It noted too that “Guyana has ideal conditions to develop bio-energy alternatives that can lower its oil import bill while attracting investment to the agricultural sector and generating new jobs — all in a socially and environmentally sustainable manner.”
The grants comprise US$675,500 from the IDB’s Japan Special Fund and US$250,000 from the IDB’s Sustainable Energy and Climate Change Initiative Fund.
The grants will finance institutional strengthening for the country’s Agro-energy Board and technical support for the ongoing development of its national agro-energy policy and will be used to provide training for bio-energy technicians, operators and managers; as well as to finance field visits by foreign companies that want to explore investment opportunities in the bio-energy sector.
The release said the grants will also be used to encourage private companies to conduct detailed feasibility and pre-investment studies in Guyana. In this regard, the IDB said that under a matching grant concept, the IDB grants will provide up to US$50,000 per project to companies that wish to study the feasibility of a specific investment proposal.
The companies will be expected to provide counterpart funding equal to 75 percent of the grant value to cover the full costs of the studies.
The IDB is of the view that the grants could help to jump-start private investment in the agro-energy sector by mitigating the pre-investment risk, Gischler said, noting that many companies have already expressed interest in the country’s agro-energy sector and the bank was confident that studies would lead to concrete investment projects.
Proposals received
To date the government has received proposals from eleven companies. Ten are from eight countries and the other is local. These proposals are expected to be evaluated with assistance from the IDB grant funding and technical assistance from the Economic Commission for Latin America and the Caribbean (ECLAC).
The process of evaluating and implementing a comprehensive strategic plan to promote Guyana’s potential for bio-energy investment and production is estimated to cost US$1.2 million with grant funding from the IDB and counterpart funding from the government, Minister of Agriculture Robert Persaud told Stabroek News late last year.
The proposals were in varying stages of development and the government needed additional information from the potential investors at the time.
The number of investors grew from early August when President Bharrat Jagdeo had announced that six companies had submitted proposals with one submitting a proposed investment of US$600 million.
The companies making proposals include the Canadian-registered company Agri Solutions Technologies which is already operating a bio-diesel facility using palm oil at Wauna in the Mabaruma District, Region One (Barima/Waini); and a locally-registered company, Sawarima Agro and Bio Energy Enterprise.
The foreign companies include Global Energy Ventures – a consortium involving capital from the US, Brazil and Jamaica, which has an interest in sugarcane cultivation for ethanol production;
Bio-Capital out of Brazil; and the US companies Twin Lakes and Grynberg are also interested in cane cultivation for ethanol production.
Zoom out of India is interested in cane cultivation for ethanol and bio-diesel production, while Integrated Bio-Energy Resources of the USA and Iberdrola of Spain are interested in oil palm cultivation for bio-diesel. AMCAR/Jatropha Inc out of France is also interested in bio-diesel.
Anand Marketing Network from Canada proposes sweet potato cultivation for ethanol production.
Canje Basin
earmarked
Meanwhile, the government has committed some 40,000 hectares of land in the Canje Basin, East Berbice/Corentyne for investment in the bio-fuel/agro-energy sector.
The IDB in its release noted that in addition to promoting Guyana´s Agro-energy Policy and welcoming enquiries from investors, the Jagdeo administration has worked with the IDB to raise awareness of the agro-energy potential in the Caribbean by hosting the seminar entitled ‘Expanding Bio-energy Opportunities in the Caribbean.’
IDB President Luis Alberto Moreno took part in the seminar underscoring the priority that the bank is giving to Guyana’s renewable energy efforts.
On that occasion Moreno emphasized Guyana’s outstanding bio-fuels potential while noting the possibility of cogenerating electricity with bagasse, a by-product of sugar and ethanol production plants. He said that preliminary IDB estimates indicated that Guyana could meet up to half of its electricity needs through cogeneration, substituting diesel and fuel oil currently used for electricity generation and reducing greenhouse gas emissions.
Increasing
emissions
Meanwhile, a study conducted by a team of researchers from Princeton University recently revealed that the growing demand for bio-fuels could actually increase greenhouse gas emissions as farmers clear forests and grassland to create more cropland.
The study concluded that land use change reduces the benefits of bio-fuels because it would release carbon sequestered by the land into the atmosphere.
Professor Tim Searchinger, one of the authors of the study, said increasing demand for food will put even greater pressures on farmers to convert land for agriculture. “There’s already a carbon benefit being provided by land and previous analyses of the benefits of bio-fuels haven’t taken that into account,” he said.
According to the team’s calculations, bio-fuels produced from soybeans reduce emissions by 70% compared to regular fuel, but when land use change is factored in, this changed to a 50% increase in emissions.
The study – first published in Science magazine – calculated that it could take decades for bio-fuels to pay back their carbon debt if forests and grasslands were converted to grow them or to grow the food crops displaced by bio-fuel crops.
Searchinger recommended that national governments should stop setting mandatory levels of bio-fuel use, and should provide producers with incentives to get their bio-fuels from existing agricultural land.
It was vital to find new ways to increase crop yields to meet demand for both food and bio-fuels, he said, adding that, “We are going to need more agricultural expansion to feed everybody and we are going to need big yield increases to keep the impact down. We need a massive worldwide strategy to boost yields using existing agricultural land.”
The Guyana government has emphasised that no agricultural lands in use would be put under cultivation for bio-fuel production and forests would not be felled for this purpose. (Miranda La Rose)
