Makeni Ethanol and Power Project, Sierra Leone

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Presented as part of the seminar: South at the Steering Wheel - Improving sustainability in land investment for bioenergy in sub-Saharan Africa

29th May 2012, 08:00 - 17:30

Naturvårdsverket (Swedish EPA), Stockholm, Sweden

Speaker: Jörgen Sandström, Addax Bioenergy

Regarding the development of Sugar cane to ethanol, comprising a sugarcane plantation, ethanol distillery and power plant, Jörgen Sandström has earlier mentioned proper planning of the social and agricultural development, including detailed charting of land and responsible land leasing, local training of the local community, initiating local food production, and to directly and indirectly support investment related operations. Compliance with social and environmental standards such as AfDB’s Environmental and Social Safeguard policies, the World Bank’s International Finance Corporation (IFC) Performance Standards is recommended.

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Makeni Ethanol and Power Project, Sierra Leone

  1. 1. Makeni Ethanol and Power ProjectSierra LeoneSouth at the Steering WheelSEI, SIANI, Stockholm, 28 May 2012Jörgen Sandström
  2. 2. About Addax BioenergyAddax BioenergyDeveloping a Greenfield renewable energy and agriculture project at Makeni, Sierra LeoneProduce bio-ethanol for export and domestic use, and green electricity for the national grid.FAO define the project as Integrated Food-Energy System (IFES) for People and ClimateProject aims to become a model for sustainable development, through the respect of strictsustainability standards and the introduction of innovative social solutions.Designed to comply with the following laws and standards:• IFC Performance Standards• AfDB Standards• Equator Principles• EU RED Directive• Roundtable of Sustainable Biofuels and Bonsucro standards
  3. 3. Sierra Leone: facts and figuresSierra Leone facts (FAO 2010):People : 5 mioSurface : 7.2 mio haForest cover : 1 mio haArable land : 5.3 mio haCultivated land : 0.8 mio haRainfall : ~3000 mm2 mio ha = 2050 food security target3.3 mio ha = availableGently undulating estate lands in Bombali DistrictAerial pictures from the project areaSierra Leone land use
  4. 4. Project overviewBumbuna damMakeni-Freetown highwayRokel riverPower transmission lineRokel riverMagbass plantationFreetown (150km)Bumbuna DamRokel RiverProject AreaExport Terminal
  5. 5. Project scopeThe Makeni ProjectLocation near Makeni, Central Sierra LeoneProject featuresFeedstock SugarcaneFactory Ethanol and PowerMarket EU export and national gridCarbon credits CDM mechanismProject capacityPlantation size 10’000ha, irrigated, mechanizedProcessing capacity 1 mio tons of cane p.a.Ethanol output 85’000m3 p.a.Excess power 15 MWWorkforce > 2000 (currently >1200)GHG savings ~190’000 t CO2 p.a.Investment EUR 267mio – project financedTiming Construction 2009 - 2014First production 2013Proven integrated sugarcane ethanol and power industry modelfor domestic and export markets
  6. 6. Participating DFI’sProject developed in partnership with eight European and African Development FinanceInstitutions (DFI’s):Netherlands Sweden GermanyBelgium CanadaSouth AfricaUnited KingdomAfrican Development BankAfrican Renewables Deal of theYear 2011 Award by PFI andPFM (Reuters and Euromoney)• Project fully funded by AOG and DFIs• Financial Close on December 2011• Loan tenor 12 years
  7. 7. Why sugarcane ethanol0 10 20 30 40 50 60 70 80 90US CornChina CornUS BeetEU W heat/BeetBrazil CaneAustralia CaneThailand CaneSierra Leone CaneUS SoybeanU S/E U W aste oilEU R apeseedU S cents per litreBiodieselSugarB eet / W heatCornPROVENMODEL1. Sugarcane grows in most of sub-Saharan Africa 2. Best CO2 savings by far4. Highest yield per hectare3. Lowest production cost
  8. 8. Best CO2 savings
  9. 9. Production cost
  10. 10. Industrial modelBagasseCrushing Juice Fuel ethanolEthanol distillationSugarcaneElectricity co-generationSierra Leone power grid10,100 ha 950,000 tons sugarcane p.a. 83’000 M3 p.a.32 MW377,000 tons p.a.64’500 MWh p.a.100’500 MWh p.a.Integrated production process using all main and bi-products = Lowest production cost + Highest carbon savingsSugar juice fermented and distilled to EthanolSugarcane fibres (Bagasse) used as boiler fuel for Power PlantGreen cane harvesting: leaves left in field protect and enrich soil qualityDistillation residues (Vinasse) used as fertilizer
  11. 11. Power generationFirst Independent Power Plant (IPP) inSierra Leone20-year Power Purchase Agreementsigned with Government and ratified byParliament100’000 MWh p.a. fed into national gridComplements seasonal productionprofile of Bumbuna damProduction during cane season and intooff-crop seasonSugarcane fibres (bagasse) feedstock2x80 ton 67 bar boilers; 32 MW turbinePower plant built by Isgec JohnThompson10km HV line built by Cegelec (VinciGroup)Addax power (red) helps level seasonality of Bumbuna hydro-dam (blue)State of the art co-generation power plant
  12. 12. Field operationsHarrowing of cane field under pivotRoad construction Planting
  13. 13. © Addax Bioenergy 2011 | Disclaimer | Site mapField operationsRiver manifoldBooster pump house Storage damPipe to booster pumpsLand Preparation Seedcane hauled from Block 16 to Block 7Planting in Block 7 Recently planted cane in Block 7
  14. 14. © Addax Bioenergy 2011 | Disclaimer | Site mapCane fields under irrigationPivot in Block 16Pivot in Block 7
  15. 15. © Addax Bioenergy 2011 | Disclaimer | Site mapFactory lay-out• Cane crushing mill4800 tons per dayIsgec – John Thompson• Fermentation andDistillation380’000 l Ethanol per dayPraj Industries• Power Plant32 MW capacityIsgec-John Thompson• Civil worksCSL Group• EPCM constructionmanagement by De Smet• Cane crushing mill4800 tons per dayIsgec – John Thompson• Fermentation andDistillation380’000 l Ethanol per dayPraj Industries• Power Plant32 MW capacityIsgec-John Thompson• Civil worksCSL Group• EPCM constructionmanagement by De Smet
  16. 16. Factory worksWorkshop foundationsSite campCement mixerBoilers assembled in India• Engineers mobilized• Factory road cleared• Civil works started• Site camps established• Admin and clinic built• Foundation worksunderway• Distillery and Powerplant in Workshopsin India• Commissionning Nov2013
  17. 17. © Addax Bioenergy 2011 | Disclaimer | Site mapFactory SiteSite campDistillery foundationsFoundation worksFermentation tank foundations and workshop
  18. 18. © Addax Bioenergy 2011 | Disclaimer | Site mapFactory SiteSite campFactory clinicFactory office blockResidential housesWater treatment plant
  19. 19. © Addax Bioenergy 2011 | Disclaimer | Site mapProject philosophy, design and ambitionsFoundationsAddax principles and experience with community relations in AfricaLong-term win-win community inter-actionCommercial success is key but must be sustainable (economic, social, environmental)EU RED sustainability criteria for biofuelsAvoid displacementProtection of biodiverse areasCarbon life-cycle analysisIFC Performance Standards – project focus onFood securityLand rightsPhysical and economic displacement - resettlementNobody worse off than beforeLaw of Sierra LeoneSLEPAWater ActLand ActImpacts: Avoid if you can, mitigate if you can’t
  20. 20. Land selection criteriaImpact assessmentAvoid physical resettlement= villages, settlements= buffer zonesProtect bio-diversity= biodiversity no-go areas= riparian forests; forested areas= 75 m buffer from riversMinimize economic displacement= subsistence farming - rice paddies= areas of intense agric activity= Firewood, Cattle grazing, FishingAgriculture criteria= bulk water supplies (proximity to river)= radius around factory= topography, drainage= soil type
  21. 21. Extensive use of GIS in land selectionCategoriesType 1: 0 peopleType 2: 8 peopleType 3: 13 peopleNumber of villagesTotal villages in projectarea: 68PopulationTotal population inproject area: 13’600Each field and structure counted, groundtruthed and mapped using GeographicalInformation Systems (GIS)
  22. 22. GIS and ground assessment of people, infrastructure and landBurnt land, river and village areas Fallow and permanent croplandsInfrastructure and grasslands Infrastructure and grasslands
  23. 23. © Addax Bioenergy 2011 | Disclaimer | Site mapExtensive land use assessmentFinal land use assessmentSavannah use: Grasslands 36% - Scrublands 32%Cropland use: Permanent 2.3% - Fallow 9%Village use: 0.1%
  24. 24. © Addax Bioenergy 2011 | Disclaimer | Site mapProject environmental and social processesLevel FiveOpportunities – People in project area prioritised for job opportunitiesLevel FourMitigation through Social Environmental Management Programme (SEMP)29 individual management plans (ESMPs) with FDP being the flagship programmeLevel ThreeCompensation through formal RAP ProcessLevel TwoLand Lease process including Acknowledgement Agreement targeting land ownersCoherent and transparent process - Lease of 5 USD per acre (abt 12 USD per hectare)Level OneFormal Stakeholder Engagement Process including Grievance processEnvironmental Social impact Assessment (ESHIA)14 individual specialist studies
  25. 25. © Addax Bioenergy 2011 | Disclaimer | Site mapProject key guidanceManagement of ExpectationsLocal dynamics and complexitiesCoherenceTransparency – DisclosureAddax NOT alone in its project area
  26. 26. Innovative dual land acquisition processTwo documents cover land acquisition:Land Lease and Acknowledge AgreementTotal RentUS$ 5 per acre - (US$ 12 per hectare)(US$ 3.60 from LL plus US$ 1.40 from AA)Distribution of Land Lease monies50% Landowner20% Chiefdom Council20% Districts,10% GOSLAcknowledge Agreement = US$1.4 directly paidLand owners rent – Monies receivedTotal amount US$ 3.20 = 63% of total rent(US$1.8 from Land Lease plus US$1.4 from AA)Plus direct Compensation for lost cropFormal compensation processLand lease Acknowledgement Agreement
  27. 27. One year long bottom-up approachCountless meetings organized with stakeholdersin project area since 2007Public disclosureAll Land Lease and ESHIA documentationStakeholder consultationThe Paramount ChiefsSection ChiefsVillage HeadsLandownersCommunity EldersMembers of ParliamentMayo and CouncilorsNGOsWard development committeeWomens CooperativeWomens Leaders and Youth LeadersRegional CommanderMediaStakeholder engagement during land acquisition processDiscussion on Land UseProject presentation to District CouncilOne of many community meetingsMedia coverage
  28. 28. © Addax Bioenergy 2011 | Disclaimer | Site mapVillage boundaries and compensation processGreat number of meetings and activities held in Sierra Leone over the last three years presenting project information, land leaseand documentation with special focus on land ownersLegal representation to Landowners by Franklyn Kargbo & CoAddax started the compensation process in 2010Landowners and their lawyers discussing land lease documentation Addax and landowners discussing project layout and demarcation ofvillage boundaries
  29. 29. Survey of village boundariesFirst real GIS maps created First real GIS village maps created
  30. 30. © Addax Bioenergy 2011 | Disclaimer | Site mapVillage boundaries and compensation processIn over 60 villages;- Village boundaries established,- AAs signed- Compensation paidCompensation process expected toBe completed in 2012
  31. 31. © Addax Bioenergy 2011 | Disclaimer | Site mapSigning of Acknowledgement AgreementsSigning ceremonies with participation of land owners, Chiefdom Council local authorities, NGO/CSOs, media
  32. 32. © Addax Bioenergy 2011 | Disclaimer | Site mapSigning of Acknowledgement AgreementsLand owners receive fact packs, maps and checks
  33. 33. © Addax Bioenergy 2011 | Disclaimer | Site mapImprovements with the Addax Land Lease processAppointment of Legal Representation by LandownersExtensive public legal consultations with LandownersLease negotiations between Addax and Landowner’s law firmsPublic authorization given by Landowners to Chiefdom Council tosign on their behalfAcknowledgement Agreements directly signed with Landowners(new invention)Direct payments to Landowners; their share in the lease increasedto 64%Survey of village boundaries for fair compensation to LandownersRelinquishment of un-used lands within 5 yearsWater Rights Agreement (first company to seek license)Signing of Acknowledgement Agreements in Malal MaraChiefdom on 27 May 2011Town hall meeting with landowner’s lawyer and Addax socialmanager
  34. 34. © Addax Bioenergy 2011 | Disclaimer | Site mapInnovative approach to livelihoods and food securityTHE FARMER DEVELOPMENT PROGRAMME (FDP)Ensure minimum impact on food crop production areas and thatlarge areas of land are available within the project area forcommunities:Aligned with Government and donor agricultural strategyDeveloped in cooperation and building on FAO experienceAssisting smallholders towards becoming self-sufficientTraining > 2000 farmers during 30 week FFLS training coursesFirst 118 farmers graduated February 2011 (70% were women)>2000 ha of lands to be prepared under the Addax FDPCurrently largest food production programme in Sierra LeoneAchievements to May 20121300 hectares planted1600 tons of rice harvested> 1400 farmers trained in better farming practices
  35. 35. © Addax Bioenergy 2011 | Disclaimer | Site mapFemale FDP graduates in majority35
  36. 36. Fleet of FDP tractors and implements
  37. 37. © Addax Bioenergy 2011 | Disclaimer | Site mapFDP lands established in the project area
  38. 38. © Addax Bioenergy 2011 | Disclaimer | Site mapEmploymentCurrently over 1200employeesIn Operations > 2000permanent employeesLocal communitiesprioritized for employmentMandatory HSSEmonitoring and protectiveequipmentHealth careOn-the-job and classroomtrainingMechanics in WorkshopElectriciansPaintersPayday38Salaries paid to localworkers since April 2010 =2.046 million US$
  39. 39. © Addax Bioenergy 2011 | Disclaimer | Site mapLessons learned Skills and Vocational TrainingFarmer Field and Life Schools(FAO curriculum) introduced>1400 farmers trained inbetter practicesOn-the job and classroomtraining for artisan employeesLiteracy and Numeracy classesfor employeesExpat artisan train localworkersGraduate AdvancementProgramme - GAPRokel Technical Institute(TVE school) projectCommunity skills projects:Water and Sanitation, Fire andTraffic safety, Forestry New training facility (classrooms and workshop)Graduation ceremonyOn-the-job trainingFarmer school training site39Crop test plot
  40. 40. Female operators trained by Addax
  41. 41. © Addax Bioenergy 2011 | Disclaimer | Site mapEmployee and Community HealthComprehensive Health ImpactAssessment in ESHIA process2 Field Clinics and 2 Ambulancesserve workers, families andcommunities in emergencysituationsFactory clinic under constructionHealth Monitoring PlanimplementedWater and Sanitation ProjectAwareness CampaignsFactory clinic foundationsField clinic and ambulanceAwareness campaignsServing communities41
  42. 42. © Addax Bioenergy 2011 | Disclaimer | Site mapOther Community BenefitsNew houses built with money from compensation / lease payments42Influx of Cash (land lease,compensation, salaries)and economic activity =direct and indirect benefits forthe local communities• Contracts awarded to localcontractors (April 10- March 12):12.7 million US$• Construction: New Houses andSanitation• New haulage roads used asaccess to market• Families can afford to payschooling fees• New services: Catering,Bakeries, Mechanics etcField kitchenNew haulage roadSchool children
  43. 43. © Addax Bioenergy 2011 | Disclaimer | Site mapMonitoring plan approved in 2011Social and Environmental Monitoring Programmeconsisting of 12 different parametersCollection of baseline dataEnvironmental monitoring (Soil, Air, Water etc.)Social monitoring (40 livelihood indicatorstrackedHealth monitoring (diseases, hygiene)Quantitative and Qualitative DataSamsung Tablets to allow processingEnvironmental & Social Monitoring is paramount
  44. 44. End of presentationInspiring Change – Growing Solutionswww.addaxbioenergy.com

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