9 March 2007
South Africa is moving to establish a biofuels industry that could create thousands of jobs and draw billions of rands in investment in the Eastern Cape, a part of the country that is rich in under-used, high-potential arable land.
Felix Hobson, senior manager of the Eastern Cape government’s agriculture resource planning and management division, said this week that the government had set aside R9.5-million for fencing land and planting canola and R8-million for planting sugar beet in the N2 Mbhashe local municipality to kick-start the project.
Developing a biofuels industry is part of a new agrarian transformation plan for the province and one of the Eastern Cape’s priority projects under the Accelerated and Shared Growth Initiative for South Africa (Asgi-SA), a government strategy to boost economic growth and reduce unemployment in the country.
“The biofuel project is envisaged to be a major Asgi-SA project in the Eastern Cape,” Hobson said, adding that it would create “a huge market for agricultural products including canola, soya beans and sunflower which was not there before.”
This would be achieved through establishing 500 000 hectares of currently under-used land for integrated rotational cropping within the next five years, Hobson said. The crops would be used to feed a planned 200 000 ton-per-annum biodiesel plant in the East London Industrial Development Zone, as well as other biofuel and agro-processing initiatives.
European investors have reportedly expressed interested in developing the East London plant.
“This intervention will require an investment by government of R1.5-billion that will secure a simultaneous R3.82-billion foreign direct investment and a R7-billion investment from local financial institutions,” Hobson said.
According to Hobson, the initiative would create around 23 000 new jobs and a sustainable R2.9-billion a year in agricultural production and processing in the province.
The biofuels industry is centred on the extraction of oil from food crops such as canola, soya, sunflower, sugar beet, maize, sorghum, wheat and sugarcane. These oils are then added to diesel or ethanol mixes, offering a cleaner alternative to non-renewable fossil fuels such as petrol.