The government and the Inter-American Development Bank are to sign a cooperation agreement for institutional strengthening and technical support in developing national agro-energy capacity.
In an invited comment on the expressions of interest in the bio-fuel energy sector, Minister of Agriculture Robert Persaud told the Stabroek News that the funds, which will provide technical support in developing institutional capacity to facilitate foreign investment in the sector, are already available but a date has to be set for the signing.
In April the IDB announced that the sum of US$925,500 or G$187.4 million in grants had been approved to encourage private investment in bio-fuel production. 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 Japanese grant of US$675,500, Persaud said, would finance institutional strengthening for the country’s Agro-energy Board and provide technical support for the ongoing development of its national agro-energy policy. It would be used to provide training for bio-energy technicians, operators and managers; and to finance field visits by foreign companies that want to explore investment opportunities in the bio-energy sector.
The US$250,000 grant from the IDB’s Sustainable Energy and Climate Change Initiative is currently being used to encourage private companies to conduct detailed feasibility studies and pre-investment studies in Guyana. Under this funding an investor is provided with a grant of US$50,000 per project along with the investors’ counterpart funding to study the feasibility of a specific investment proposal.
Persaud said that in addition to the eleven companies that had put forward proposals for investing in the sector a number of others had since come forward with proposals including some from the United Kingdom and another from India.
He said the company from India, ESSAR, was interested in building its own refinery to produce ethanol from molasses made by the Guyana Sugar Corporation initially, as well as cultivating its own cane.
The discussions with all the investors are ongoing as part of the evaluation process, and there was no particular deadline to be met. Persaud said that the government was looking at the best technology that would not compromise food production and the environment.
The government, too, he said was expected to take part in the bio-fuel/agro-energy conference that Brazil would be hosting in November.
By April 2008 the government had received proposals from eleven companies, including ten from eight countries and one, locally, with an interest in investing in and developing a local bio-fuel/agro-energy sector.
The process of evaluation and implementing a comprehensive strategic plan to promote the country’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.
The proposals submitted range from an investment of US$200 million to US$600 million.
The companies with 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 which 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 of France is also interested in bio-diesel. Anand Marketing Network from Canada is proposing sweet potato cultivation for ethanol production.
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 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.