Policy issues in the promotion of cassava as abio-energy crop, the experience in Nigeria<br />Boma Simeon Anga, <br />Chai...
KEY Drivers of Africa’s Bio-fuel initiative<br /><ul><li>Urgent need to reduce energy insecurity
Africa has 13% of global population yet uses 3% of electricity used globally.
 Only 1 in 4 people in Africa has access to electricity.
Under exploitation of available resources :  6% of hydroelectricity and 0.6% of geothermal potential exploited.
 Abundance and decentralized availability of biomass resources especially cassava
Need to raise GDP growth rate from 3.5% to 8% if Africa is to meet the MDGs & needs  to be a corresponding increase in ene...
In addition the price of crude oil is escalating at     incredible rate creating an urgency for development of alternative...
THE NIGERIAN E10 BIO FUEL PROGRAMME<br />
 Creation of The NNPC Renewable Energy Division in 2005<br />Vision<br />To create a thriving, domestic bio-fuels industry...
Rural wealth & Job Creation<br />Maximize Carbon Credit opportunities<br />Sustainable Development<br />Thriving Homegrown...
Estimated land availability for large scale bio-fuel operations is above  42 million hectares
Nigeria has the potential to create a sustainable bio-fuel industry capable of generating between 1,000,000 to 1.5 million...
Creation of mechanisms designed to promote integrated agro-industrial operations, out-grower schemes and research, e.g. th...
Creation of a Bio-fuels Research Agency to coordinate and promote the long term development of improved varieties, techniq...
The setting up of a Bio-fuel Pioneer Fund to be managed by an investment bank with upstream Oil & Gas operators as equity ...
Investment Incentives<br />Guaranteed 10yrs. Off-take Contract from NNPC<br />10 years  income tax holiday with a possibly...
Investment Incentives<br />Waivers for value added tax payment in respect of all services and products consumed by Bio-fue...
FLOW CHART OF CASSAVA BASED GASOHOL PRODUCTION PROCESS<br />
We are also engaging key stakeholders involved in the formative industry throughout the duration of the programme.<br />Fe...
Provide fiscal and political support</li></ul>Farmers and Farming Communities<br /><ul><li>Provide cassava and sugar cane ...
Ensure smooth disruption free operations</li></ul>Research Institutes<br /><ul><li>Provide information on local agricultur...
Provide technical support</li></ul>Financial, Technical and Managerial Partners<br /><ul><li>Provide funding and technical...
Main Processes, Risks and corresponding Insurance covers <br />
Comparison of PMS and E10 shows the many benefits E10 offers with the constraint of tight water contamination prevention.<...
Bio-Ethanol market opportunity in Nigeria<br />Market Value:3.08 Billion dollars Annual Projected growth rate: 5%<br />
Investment opportunities<br />Daily requirement: 14,794,520 liters/day<br />Feedstock requirements: 30,258,500tons of fres...
The recommended business model is a large scale integrated operation open to out-growers, but not dependent on them.<br />...
Raw material quality through controlled farming practices
Low raw material cost through high yields and short travel distances</li></ul>We studied the Brazilian and Thai industries...
Thailand industry lack of integration and reliance on fragmented farming community make their ethanol supply chain less re...
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Session 7.2 Policy Issues in the promotion of Cassava as a bioenergy crop: experience in Nigeria by Anga from NEPAD

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Session 7.2 Policy Issues in the promotion of Cassava as a bioenergy crop: experience in Nigeria by Anga from NEPAD

  1. 1. Policy issues in the promotion of cassava as abio-energy crop, the experience in Nigeria<br />Boma Simeon Anga, <br />Chairman, NEPAD Pan African CassavaInitiative<br />
  2. 2. KEY Drivers of Africa’s Bio-fuel initiative<br /><ul><li>Urgent need to reduce energy insecurity
  3. 3. Africa has 13% of global population yet uses 3% of electricity used globally.
  4. 4. Only 1 in 4 people in Africa has access to electricity.
  5. 5. Under exploitation of available resources : 6% of hydroelectricity and 0.6% of geothermal potential exploited.
  6. 6. Abundance and decentralized availability of biomass resources especially cassava
  7. 7. Need to raise GDP growth rate from 3.5% to 8% if Africa is to meet the MDGs & needs to be a corresponding increase in energy demand.</li></li></ul><li>Target Beneficiaries: Net oil-importers in 2009 (39 countries) 25 countries are landlocked;<br />Note: oil producers are underlined<br />Benin, Botswana, Burkina Faso, Burundi, Cape Verde, Central African Republic, Comoros, Djibouti, Eritrea, Ethiopia, Gambia, Ghana, Guinea, Guinea-Bissau, Kenya, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritius, Morocco, Mauritania, Mozambique, Namibia, Niger, Rwanda, Sao Tomé and Principe, Senegal, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia, Zimbabwe.<br />
  8. 8. In addition the price of crude oil is escalating at incredible rate creating an urgency for development of alternatives sources of energy:<br />Currently there is war in Northern Iraq. <br />Iran (Nuclear issue) – USD 100/bbl<br />Lebanon War<br />Militancy in Nigerian Niger Delta<br />Invasion of Iraq<br />Iranian Revolution<br />Invasion of Kuwait<br />Yom Kippur War<br />4<br />
  9. 9.
  10. 10. THE NIGERIAN E10 BIO FUEL PROGRAMME<br />
  11. 11. Creation of The NNPC Renewable Energy Division in 2005<br />Vision<br />To create a thriving, domestic bio-fuels industry within the next five (5) years<br />Mission Statement<br />RED (Renewable Energy Division) is established to introduce and sustain the production of fuel ethanol and Bio-diesel from biomass (cassava, sugarcane, soybean oil, palm oil, etc) and thereby integrating the agricultural sector with the downstream petroleum industry<br />Quality Policy<br />RED shall provide consistent, steady supply of alternative fuel to the utmost satisfaction of customers and continuously seek to improve its quality management system<br />
  12. 12. Rural wealth & Job Creation<br />Maximize Carbon Credit opportunities<br />Sustainable Development<br />Thriving Homegrown Industry<br />Environmentally Friendly<br />Energy Self-Sufficiency<br />Integrate Oil & Gas with Agriculture<br />Nigeria’s Emerging Fuel Ethanol Economy<br />Rationale<br />This program should lead to:<br /><ul><li>Nigeria’s land is ideally suited for sugarcane & cassava production. Cassava has a net positive energy balance of 8.80-9.15 MJ/Liter.
  13. 13. Estimated land availability for large scale bio-fuel operations is above 42 million hectares
  14. 14. Nigeria has the potential to create a sustainable bio-fuel industry capable of generating between 1,000,000 to 1.5 million jobs.</li></li></ul><li>BIO ETHANOL FUEL POLICY<br /><ul><li>Market entry shall be through registration of Bio-fuel plants/projects by the Bio-fuel Energy Commission.
  15. 15. Creation of mechanisms designed to promote integrated agro-industrial operations, out-grower schemes and research, e.g. through subsidized loans, issuance of licenses, private-public partnership, etc.
  16. 16. Creation of a Bio-fuels Research Agency to coordinate and promote the long term development of improved varieties, techniques and processes across existing Agencies
  17. 17. The setting up of a Bio-fuel Pioneer Fund to be managed by an investment bank with upstream Oil & Gas operators as equity owners. </li></li></ul><li>APPROVED POLICY AND INCENTIVES FOR THE NIGERIAN BIO-FUEL INDUSTRY:<br />Approval of blending of PMS with 10% fuel ethanol by composition and diesel with 20% bio-diesel by composition to create demand for bio-fuels in Nigeria.<br />Official designation of Bio-fuels as an agro-allied industry sector.<br />Commercial guarantee by NNPC for off-take of bio-fuels produced within Nigeria.<br />Designation of bio-fuel industry sector as a pioneer sector, which provides the basis for a package of tailored fiscal incentives.<br />Creation of a Bio-fuel Energy Commission to govern the industry and lease with all relevant ministries and agencies.<br />
  18. 18. Investment Incentives<br />Guaranteed 10yrs. Off-take Contract from NNPC<br />10 years income tax holiday with a possibly for five years additional extension for all businesses registered for bio-ethanol and its feedstock production<br />Exemption from all import & customs Duty in respect to importation of all equipments. inputs, chemicals for use in Bio-ethanol production<br />Withholding & capital gains Tax exemption on dividends, foreign loans and for services rendered by foreigners to the Bio fuel company.<br />
  19. 19. Investment Incentives<br />Waivers for value added tax payment in respect of all services and products consumed by Bio-fuels producing industry<br />Duty free importation of Bio-fuels for ten years<br />Duty exemption for the importations of farm machineries, tractors, implements, fertilizers, chemicals and all inputs that will be used in the farm for bio-fuel feedstock production.<br />CBN administered Preferential loan arrangement for large scale nucleus farm development and establishment of integrated fuel ethanol factories.<br />
  20. 20. FLOW CHART OF CASSAVA BASED GASOHOL PRODUCTION PROCESS<br />
  21. 21. We are also engaging key stakeholders involved in the formative industry throughout the duration of the programme.<br />Federal, Local and State Government and Agencies<br />Key Stakeholders<br />Envisaged Role/Responsibility<br /><ul><li>Facilitate policy implementation
  22. 22. Provide fiscal and political support</li></ul>Farmers and Farming Communities<br /><ul><li>Provide cassava and sugar cane input for ethanol production
  23. 23. Ensure smooth disruption free operations</li></ul>Research Institutes<br /><ul><li>Provide information on local agricultural practices, supply and demand data
  24. 24. Provide technical support</li></ul>Financial, Technical and Managerial Partners<br /><ul><li>Provide funding and technical/managerial expertise </li></ul>General Public<br /><ul><li>Early acceptance of new ethanol/gasoline blend</li></li></ul><li>Sugar cane<br />Cassava<br />Bio-diesel<br />Completed feasibility studies:3 sugar cane sites in Benue and Gombe States2 cassava sites in Ondo and Anambra States. Studies for 3 oil palm for biodiesel sites to commence in 4Q 2007<br />S<br />o<br />k<br />o<br />t<br />o<br />Katsina<br />Jigawa<br />Z<br />a<br />m<br />f<br />a<br />r<br />a<br />B<br />o<br />r<br />n<br />o<br />Y<br />o<br />b<br />e<br />K<br />e<br />b<br />b<br />i<br />K<br />a<br />n<br />o<br />B<br />a<br />u<br />c<br />h<br />i<br />K<br />a<br />d<br />u<br />n<br />a<br />G<br />o<br />m<br />b<br />e<br />Niger<br />Adamawa<br />P<br />l<br />a<br />t<br />e<br />a<br />u<br />F<br />C<br />T<br />Kwara<br />Oyo<br />N<br />a<br />s<br />a<br />r<br />a<br />w<br />a<br /><ul><li> Every state has potential for biofuels project using various crops- Engaging state governments to lead biofuels initiatives in their states</li></ul>Taraba<br />E<br />k<br />i<br />t<br />i<br />K<br />o<br />g<br />i<br />Benue<br />O<br />s<br />u<br />n<br />O<br />n<br />d<br />o<br />O<br />g<br />u<br />n<br />E<br />d<br />o<br />L<br />a<br />g<br />o<br />s<br />E<br />n<br />u<br />g<br />u<br />E<br />b<br />o<br />n<br />y<br />i<br />a<br />A<br />n<br />a<br />m<br />b<br />r<br />Abia<br />I<br />m<br />o<br />D<br />e<br />l<br />t<br />a<br />C<br />r<br />o<br />s<br />s<br />R<br />i<br />v<br />e<br />r<br />A<br />k<br />w<br />a<br />I<br />b<br />o<br />m<br />R<br />i<br />v<br />e<br />r<br />s<br />B<br />a<br />l<br />y<br />e<br />s<br />a<br />15<br />
  25. 25. Main Processes, Risks and corresponding Insurance covers <br />
  26. 26. Comparison of PMS and E10 shows the many benefits E10 offers with the constraint of tight water contamination prevention.<br />
  27. 27. Bio-Ethanol market opportunity in Nigeria<br />Market Value:3.08 Billion dollars Annual Projected growth rate: 5%<br />
  28. 28. Investment opportunities<br />Daily requirement: 14,794,520 liters/day<br />Feedstock requirements: 30,258,500tons of fresh cassava approx.1,512,925 hectares<br />Recommended minimum Bio-ethanol plant size: 180,000liters/day<br />No of Bio-ethanol plants required: 82 plants<br />Total investment outlay/Plant : <br />Without Nucleus Farm:$60-75 Million dollars.<br />With Nucleus farm: $90-110 Million dollars<br />Invest required for 82 Integrated Bio-ethanol plants: $7.38 Billion US Dollars<br />
  29. 29. The recommended business model is a large scale integrated operation open to out-growers, but not dependent on them.<br />Tight integration between plantation and plants is required to ensure:<br /><ul><li>Supply reliability through disciplined management of harvest time
  30. 30. Raw material quality through controlled farming practices
  31. 31. Low raw material cost through high yields and short travel distances</li></ul>We studied the Brazilian and Thai industries and concluded that their experience support integrated model as the base case<br /><ul><li>Brazil industry is highly integrated
  32. 32. Thailand industry lack of integration and reliance on fragmented farming community make their ethanol supply chain less reliable</li></ul>An operation with adequate plant capacity could be profitable, yet offer the ability for out-growers to supply plant:<br /><ul><li>Large plant is required to accommodate future growth
  33. 33. Out-grower scheme is required to ensure out-growers can supply at competitive prices and facilitate community integration</li></li></ul><li>2006 objectives are set to lay the foundation for significant benefits to be gained over the next 5 years.<br />2006 Objectives<br />5-year Goals<br />Ethanol fuel imported & launched into the Nigerian market<br />Bio-fuels policy developed<br />Feasibility studies completed for integrated plantation/plant<br /><ul><li>3 sugarcane
  34. 34. 2 cassava </li></ul>Significant progress in securing investors for 1st set of projects<br />Note: * Jobs created indirectly should range between 4 to 8 times direct jobs<br />
  35. 35. We are implementing three sub-programmes to deliver the vision: Domestic, Import and Policy.<br />Today<br />August 2005<br />2009<br />24-36 months to operating stage<br />4 months<br />Continuous<br />Planning<br />Building Foundation<br />Growing<br />Secure land<br />Domestic<br />Bio-fuel<br />Programme<br />Design & build projects<br />Operate projects<br />Define best crop route / develop economic rationale <br />Expand best practice models <br />Detailed feasibility<br />Define growth models<br />Define Operating Strategy<br />Define strategic partners<br />Create venture<br />Monitor program effectiveness<br />Develop implementation plan<br />Secure financing<br />Third-Party Programme Support<br />Run test program<br />Identify technical & quality capabilities required / Check infrastructure<br />Ethanol <br />Import<br />Programme<br />Ramp-up to rest of network<br />Design Supply, Pricing & Marketing Strategy<br />Contract Ethanol imports<br />Develop implementation plan<br />Monitor customers and quality control effectiveness <br />Policy<br />Define policy changes required to<br />support E10, Bio-diesel & long term strategy<br />Implement Policy Changes<br />
  36. 36. The Layout of the Crownek Green Energy Integrated Ethanol Factory Complex <br />
  37. 37. Nigeria has the potential to create a sustainable bio-fuel industry capable of generating between 500,000 and one million jobs.<br />Comments<br />Nigeria’s land is ideally suited for sugarcane, cassava and palm oil production<br />Estimated land availability for large scale bio-fuel operations is above 2 million hectares<br />Per million hectares of sugarcane, cassava and palm oil:<br />Direct Jobs: 100, 000<br />Indirect Jobs: 400,000 to 900,00<br />50 to 80 bio-fuel large scale operations (10,000 to 20,000 ha)<br />1/3 of current gasoline consumption<br />
  38. 38. Nigerian Scenario <br /><ul><li>Potential for Bioethanol production </li></ul>- 4.95 billion lit / annum<br />
  39. 39. The Cassava Crop<br />
  40. 40. Availability of improved cassava planting materials adapted to All Agro ecologies<br />Commercial production of cassava planting materials is big business & big money.<br />
  41. 41. The Biofuels industry presents vast social, economic and environmental benefits for Nigeria.<br /><ul><li>Good returns on invested capital
  42. 42. Lower acquisition costs for fuel
  43. 43. Increased local production of sugar and power complement efforts at filling existing supply gaps in Nigeria (for sugarcane to ethanol)
  44. 44. Increased ability to hedge supply risk (either domestic or through imports) by offering additional source of fuel</li></ul>Economic Benefits<br />Environmental <br />Benefits<br /><ul><li>Environmentally friendly fuels / less pollution
  45. 45. CO2 emission reduction</li></ul>Social Benefits<br /><ul><li>Rural wealth and job creation
  46. 46. Sustainable development</li></ul>28<br />
  47. 47. Current Policy Review to be completed in November 2010.<br />Liberalized the Bio-fuel market NNPC no longer the exclusive off-taker<br />Make the incentives more robust and investors friendly<br />Lower the entry barriers and reduce to the barest minimum bureaucratic bottlenecks<br />Eliminate importation of Bio fuels to seed the market<br />
  48. 48. “Embrace the New Reality Cassava Is Africa’s Food, Energy & Cash Crop of The 21ST Century.”<br />
  49. 49. There is a Bright Prospect of Cassava Development in Africa, please be part of it.<br />THANK YOU<br />
  50. 50. For Further Details Contact: THE PROJECT CONSULTANTS:<br />:<br />Mr. Boma Simeon Anga<br />Executive Chairman<br />Cassava Agro industries Services Limited<br />House 32, 351 Road, off 3rd Avenue, Gwarinpa Estate,<br />Abuja.<br />Tel: +234-(0)803-303-1097, <br />(9)290-7366<br />Fax: +234-(9)222-4046<br />WEBSITE: www.cassavaagroindustries.com<br />e-mail: bomaanga@yahoo.com, boma@cassavaagroindustries.com<br />

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