Mozambique clears $280m cane-based ethanol plant

Mozambique has approved a $280-million agricultural project to produce ethanol from sugar cane, a cabinet spokesperson said on Wednesday.

Luis Covane, also Mozambique's deputy Education and Culture minister, told Reuters the project was expected to produce about 2,5-million tons of sugar cane each year, from which 213-million litres of ethanol would be produced annually.

"Production will begin in 2012 and will generate 82,5 MW of power and create 2 650 jobs and we have also allocated 18 000 hectares of land to the implementing company, Mozambique Principle Energy, which has Mauritian interests", Covane said.

He said 20 percent of the power output would be exported and the remaining 80 percent had been earmarked for national use.

"We expect to generate an annual revenue of $57-million in 2011, another $119-million the following year and $114 in 2013."

The project will be launched in Dombe district in the central Manica province.

In 2007, the government approved a $510-million biofuels project in the southern Gaza province to produce 120-million litres of ethanol by 2010.

The project, known as PROCANA, will also create 7 000 jobs and an annual revenue of $40-million as of 2010.

Complete construction of the factory, by a Brazilian contractor, is expected to take three years.