Guyana signed biofuel MoU with ANSA McAl in September

Guyana-based ANSA McAL Trading Ltd signed a memorandum of understanding (MoU) with the Guyana government for the establishment of an ethanol production project on September 30 last year, today’s Trinidad Guardian reported.

No such announcement was made in Georgetown and if confirmed here it follows similar secret signings by the previous Jagdeo administration.

The Guardian report said that the MoU was signed by Anthony N Sabga III, business development executive, ANSA McAL Group, Dr Roger Luncheon, head of the presidential secretariat and Desmond Mohamed, chief executive officer (former), Guyana Office for Investment.

The report added that it was witnessed by Robert M Persaud, former Minister of Agriculture, Aneal Maharaj, Group finance director, ANSA McAL and Beverley Harper, managing director ANSA McAL Trading Guyana.  The report said that in a statement, ANSA McAL said that both parties were currently engaged in an in-depth feasibility study, which includes infrastructure and development works; plant and equipment and rolling stock.

According to the Guardian report, the ethanol plant is projected to have a capacity to process up to 2,000,000 tons of sugarcane per year and produce up to 40 million gallons (nameplate capacity) of ethanol per year. The agro-energy industrial project will be built on 110,000 hectares of virgin land, according to the ANSA statement.

“As a result, the government of Guyana and a subsidiary of the ANSA McAL Group, a regional conglomerate, have agreed to partner to establish a world-scale biofuel project. “The proposed ethanol project will be well positioned to successfully become a low-cost, globally competitive provider of ethanol to international and regional markets,” read the statement. According to the Guardian report, the statement said it is expected that through the synergies between the Guyana government and ANSA McAL the people of Guyana will benefit through:
• Generation of entrepreneurial service industries, resultant employment and wealth creation for nationals of Guyana
• Opportunity for Guyana to become the regional leader in the development of regional policies, standards and frameworks for utilisation of alternative fuels, with the potential of reducing the region’s dependence on fossil fuels.

For a decade or so, biofuel has been on the agenda but the Guyana Government has made little progress on a deal until this announcement with ANSA. In May of last year, Stabroek News had reported on the latest developments in the sector as pronounced on by former Agriculture Minister Persaud but there had been no specific mention of a deal with ANSA.

Persaud had said then that several companies were conducting feasibility studies in addition to the Guyana Sugar Corporation (GuySuCo) planning a small-scale demonstration ethanol plant at the Albion Estate in Berbice.

He said that the corporation was working with Brazilian firm, USI, to establish the small-scale demonstration ethanol plant at the Albion Estate with part funding from a Technical Cooperation (TC) grant from the Inter-American Development Bank (IDB). In April 2008, the IDB announced that US$925,500 or $187.4 million in grants had been approved to encourage private investment in bio-fuel production here.

“The design of the plant has been completed and forwarded to the IDB for this approval. The plant will produce anhydrous ethanol using either sugar cane juice or molasses,” Persaud said. “The demonstration ethanol plant will be used for training and demonstrations to prospective investors,” he added. The minister said the development of this promising sector remains a top priority for the government and expressed optimism that “there will be forthcoming investment in the sector very soon”.

He pointed out that there are several foreign companies actively involved in feasibility activities in large-scale ethanol investment in Guyana. Earlier this week, a team from the Caribbean visited Guyana to pursue this, he said. This could have been a reference to ANSA.

Persaud had noted then that government had a policy whereby it is intent on inviting private investment from the international and local communities for the development of this sector. He said at least five potential investors have been short listed and to date two of them have already visited Guyana and have met with stakeholders, including the visit by one of the Caribbean’s largest conglomerate the previous week.

The minister had stressed that the Agro-Energy Policy clearly stated that land used for food production will not be converted to grow bio-energy feedstock. He noted that government has allocated over 100,000 hectares of land in the Canje Basin to be used specifically for the growing of bio-energy feedstock. Additionally, he said, there are large parcels of land in the intermediate savannahs which may also be utilized. “The use of molasses as a feedstock for the production of ethanol is also being touted to investors. GuySuCo’s excess molasses is adequate enough to produce ethanol for the implementation of an E10 blend in Guyana,” he said.

He noted that having recognised that there is need to seriously address the adverse effects of climate change, Guyana had drafted an ‘Agro-energy Portfolio – A Strategic Framework for Implementation’ document. The purpose of this strategy document was to provide a roadmap for the development of a competitive and sustainable agro-energy sector in Guyana. Guyana also partnered with the Caribbean Renewable Energy Development Programme (CREDP), the IDB, the Inter-American Institute for Cooperation on Agriculture (IICA) and the Organization of American States (OAS) in organizing a high-level Seminar on biofuels in August 2007.

In addition to the initial legislative framework, Persaud said then, the TC with the IDB to expand bio-energy opportunities in Guyana was agreed upon.  He noted that the main aim of the partnership, which commenced on September 23, 2008, was to provide assistance that will permit the government to define a critical path in order to promote the development of the bio-fuels sector.

He said then that the contract for the delivery of the service consultancies was awarded in July 2010 to a US-based consulting firm, Numark Associates Inc. Numark was tasked, among other things, with developing an appraisal system for bio-energy proposals from private developers, an investment strategy to attract bio-energy developers and capacity building programmes for local stakeholders. The subject of blending was also specifically addressed and a framework for the implementation of an E10 and B5 blend would be crafted.
The consultant had completed the draft of the first report which government had studied and given its comments on. A final draft incorporating those comments was expected to be delivered in May last year.

In November 2009, President Bharrat Jagdeo, at a press conference had indicated that in the development of a local bio-fuel sector, Guyana will likely pursue next-generation bio-fuels, which are not made from food crops. Following high oil prices and with increasing concerns about carbon dioxide emissions –which contribute to global warming, from fossil fuels – tremendous interest had been shown in the bio-fuels sector globally. In Guyana, proposals were received from at least 11 companies interested in investing in developing a local bio-fuel/agro-energy sector.

Jagdeo had noted that there is new research ongoing into next-generation bio-fuels, pointing to new technologies such as cellulosic conversion, whereby bio-mass such as straw and other vegetation–considered useless now–are converted into bio-fuels. “So I think that’s going to be the future; another generation of bio-fuels that are made not from food crops but from other biomass. That is what we probably will support,” he had said at the time.

IDB President Luis Alberto Moreno at a seminar on the agro-energy sector had 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.

 

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