10 år sedan
Investments in renewable energy have positive impacts beyond environmental benefits
Global Challenge’s project ABBBA – African Biofuel & Bioenergy Business Assessment – recently organized a study trip to Addax Bioenergy in Sierra Leone with Swedish and African stakeholders. Last Monday ABBBA arranged a breakfast seminar at Swedfund where experiences from the field trip and the project in general were discussed.
Addax Bioenergy has established a plant for ethanol production in Makeni, Sierra Leone. In addition to ethanol production, green electricity to the grid is being produced and local small farmers are providing assistance in increasing their production of rice and other crops. The investment, with Swedfund as one of the financiers, is the first project to meet the Roundtable on Sustainable Biomaterials (RSB) certification, but has also been criticized by NGOs. During the study visit, participants were given a more nuanced picture of the project than the one put forward by several NGOs and the media.
Food, fuel and power in one
ABBBAs Mattias Goldmann opened the seminar by emphasizing the importance of examining a project such as Addax Bioenergy, with its combination of energy production, food production and local electricity supply – food, fuel and power in one. As a project that is certified by RSB and fulfils the requirements of the EU Renewable Energy Directive (RED) Addax Bioenergy is furthermore interesting in a sustainability perspective: RED requires among other things greenhouse gas emission reductions of at least 35 per cent and consultation with local communities.
Mattias further emphasized that investments in renewable energy has several advantages beyond environmental benefits. Production of fossil fuels like oil lacks for example trickle-down effects, while biofuel production is on-shore and can be combined with small-scale farming through outgrowers that can be included in the production.
The debate on food vs. fuel is also more relevant when it comes to fossil fuels, where there generally might be a conflict between energy and food production. This has for example been the case in countries like Nigeria and Somalia where native fishermen have been negatively affected by oil extraction in the region.
Increased focus on energy production in Sub-Saharan Africa
Gunilla Nilsson, Senior Investment Manager at Swedfund, gave an account of the Swedish DFI Swedfund’s who’s overall goal is to promote poverty reduction through sustainable enterprising. Swedfund invests primarily in low-income countries and has recently increased its focus on sub-Saharan Africa. Three sectors have been identified which can provide significant developmental impacts on the countries that Swedfund invests in – the energy sector is one of these. The lack of electricity supply is a key issue in sub-Saharan Africa, where only 30 per cent of the population has access to some form of electricity. The lack of reliable electricity is also one of the three biggest challenges that companies are facing. Swedfund’s overarching goal is poverty reduction and the institution is investing in non-renewable fuels. Investments in projects that have a renewable component are however encouraged.
Biodiversity and monitoring
Jan Wärnbäck, Agriculture Officer at the WWF, was one of the participants in ABBBAs study visit at Addax Bioenergy, and was also one of the speakers at the breakfast seminar. Jan shared three reflections from the visit that regarded eutrophication, biodiversity and biological corridors – something that is also included in the certification criteria of the RSB. Is there a system that controls the impact of the streams in the production area and the nutriants that the plants do not absorb? How do you ensure that the project does not lead to the transformation of the area into a large monoculture?
In response to this Jörgen Sandström, Executive Officer of Addax Bioenergy, stressed that the project is still in a development phase and that work to develop monitoring methods is on-going. For example, the company is in the process of developing satellite surveillance systems and drones that will be used to make observations of the fields. The company also uses sensors in the ground as a way to obtain information about the nutrient and water supply needed. The results from these observations are however expected to take about one to two years per field.
As regards biodiversity Jörgen mentioned that this is already quite limited – partly as a result of the civil war that plagued Sierra Leone for more than a decade, there hardly any mammals in the area.
Land issues and economic incentives
The subsequent discussion revolved among other things around land issues. Ensuring local community ownership is complicated in a country where traditional landowners are excluded from the legislation and where there is no land register. Addax Bioenergy uses a model where leases are paid annually whereby 20 per cent goes to the landowners, 20 per cent each to the district council and chiefdom council and 10 per cent to the government. In addition, Addax signes acknowledgement agreements with traditional landowners that besides the agreement also receives a map of their own land.
The economic benefits that have been given to Addax Bioenergy’s investment was also an issue raised during the discussion. The African agriculture sector is very exposed to competition, yields tend to be low and many of the countries are difficult to invest in. Compared to for example the Telecom industry, where the return on investment is expected to come within three years, agricultural investments are much more risky. Economic incentives such as tax benefits are therefore a central part of the Sierra Leonean government’s strategy to encourage investments in agriculture and energy production.
Click here to read about ABBBAs study visit to Addax Bioenergy.
Read more about the Global Challenge’s ABBBA-project here.
