Ethanol project to comply with empowerment laws

via Ethanol project to comply with empowerment laws September 25, 2014

THE Greenfuel ethanol project in Chisumbanje is not perfect and the project will meet the 51-49% indigenisation policy requirements with time, an official has said.

The project is a joint venture between Arda and Billy Rautenbach’s companies — Ratings and Macdom.

Agricultural Rural Development Authority (Arda) board chairman Basil Nyabadza said yesterday Finance minister Patrick Chinamasa had refused to take the stake in Greenfuel as it would bring more debt to Treasury.

Nyabadza said Chinamasa was in favour of foreign direct investment, but did not want to inherit debt from any company.

“We are concentrating too much on ownership yet production should be the issue where we need to produce. You cannot talk of ownership on day one because any investment does not pay on day one. It’s a process,” he said.

“If you take 51%, it means you are taking over the debt.”

A structure formulated during the inclusive government had proposed that government would get 51%, while the investor would own the remainder.

The proposal died when the inclusive government’s tenure ended last year.

Nyabadza gave the example of Ziscosteel which went in circles because of the indigenisation issues.

In 2010, Indian firm Essar Africa Holding was given the nod to take over Zisco in a deal worth $750 million.

The deal could not be consummated as government wanted control of the troubled steelmaker.

The ethanol project, which ushered in mandatory blending, has been in the eye of a storm amid revelations from motorists that blended fuel runs out faster compared to unleaded one. This means that the motorists have to incur an extra cost.

Mandatory blending started at E5 (5% ethanol and 95% unleaded) in August last year rising to E10. Currently the blending is now at E15 (15% ethanol and 85% unleaded).

Local vehicle assemblers have said that they would give warranties up to E10.

But promoters of the project say the country spends $6 million in fuel costs everyday and the use of ethanol will help the country to save on fuel costs.

Nyabadza said the price of fuel in Zimbabwe was lower compared to Malawi and Zambia after the introduction of mandatory blending.

He said the move by Greenfuel to produce E85 was commendable as it would benefit the country as a whole.

Flexfuel technical manager Ian McFadyean said Greenfuel has imported 7 000 E85 kits. So far, 5 000 have been fitted to various vehicles in the country.
This is a drop in the ocean considering that the vehicle population in the country is close to one million.


  • comment-avatar
    Mixed Race 8 years ago

    This Mr Nyabadza is so ill-informed on this blending issue or he is just naive to take the ignorant motorists of this country for granted.These are the facts about ethanol usage world wide except in Zimbabwe:-
    1-Zambia and Malawi stick to E10,therefore they adhere to international standards which are reasonably safe for all Japanese and European cars without having to use these so-called conversion kits which do not alter the actual engine design.It is logical that their fuel is E10 which is close to genuine fuel,therefore we should expect it to cost more than E15.Your cheap comparison reveals your lack of scientific facts on blending of fuels.The two countries you have quoted,sell fuel which is 5% higher quality than ours.Why use other countries to justify your product instead your home grown facts if you have any?
    2-These kits mainly protect the fuel system and allow the fuel to burn,but at what cost to the performance of an engine designed by proper engineers over the years to function on true fuel.Your company just wants to sell its product at all costs regardless to the injury this product does to our vehicles.
    3-You now talk of E85 which makes me think you are a crazy person because that would indirectly cost the country more on replacing vehicles because most of the current vehicles will not function with that blend.You are now forcing everybody to have diesel vehicles which is another stupid mentality because diesel vehicles are more expensive to repair than petrol ones and cause more pollution.People holding influential posts should think before they make press statements.
    Note that recent studies have confirmed that diesel fumes cause certain cancers so think wisely before you kill your countrymen due to cheap financial gains.

  • comment-avatar
    dubbozimbo 8 years ago

    Hahaha Billy hope your new business partners screw you over like you have done to your fellow Zimbos.