Buchanan Renewables announced in 2009 that it planned to help Liberia’s power sector by using woodchips from old rubber trees to generate 35 MW of electricity; however, some are claiming that the company is only exploiting the country’s resources to export to Europe.
In November 2008, Buchanan Renewables’ Liberian subsidiary, Buchanan Renewables (Monrovia) Power, Inc., received approval for a $112-million loan to help build a 50-MW independent biomass power project. Local news source, the Daily Observer, published an OpEd on September 3 that detailed how the company had come into Liberia with a “grandiose and highly hopeful plan” to generate power. The article continued: “Nearly five years on, however, GradeoneWatches.me the company has yet to build the power plant and as far as we know has not assisted a single farm in best replica watches replanting their rubber trees!”
Alternative Energy Africa asked the Liberian news source if it had reached out to Buchanan Renewables, but to date, the newspaper has not responded. We reached out to Buchanan Renewables to find out the reasoning behind the failure to begin the power plant, European exports, and the $112-million loan.
The Daily Observer reported: “And here is the third thing the company, now called Buchanan Renewable (BR), has done: they have harvested hundreds of millions of wood chips from felled Liberian rubber trees, and begun shipping them, not to Kakata, but the Europe, to power not its Liberian ‘plant,’ but European power plants! So as it turns out impoverished, underdeveloped Liberia is now subsidizing cheap energy not in Liberia, but in Europe!”
The Buchanan Renewables (BR) Group was formed in April 2008 after Pamoja Capital acquired Buchanan Energies and its sister companies. The group has two main sectors: BR Fuel and BR Power, which are legally registered companies in Liberia with separate CEOs among other business activities. BR Power entered into a concession agreement and PPA with the Liberian government in March 2009 for the construction and operation of a 36-MW biomass power plant.
Under the agreement, BR Power completed the environmental and social impact assessment and tendered and negotiated construction contracts. The company said that it has been ready to begin construction of the plant in line with the concession agreement since 2009. However, the company has run into a roadblock after the government and the Liberia Electricity Corp. (LEC) raised concerns about some of the already agreed upon terms which has forced the company to re-enter into new discussions.
And the delays have come at a hefty price for BR Power. The company said, “To date, BR Power has spent over $20 million on engineering consultants, land leases, legal fees, etc. in preparation for the construction of the plant.” It went on to say: “BR Power remains committed to working with the government, LEC, and OPIC to resolve outstanding issues in order to start construction of the plant and fulfill the social obligations of its concession agreement. However, BR Power is unable to being construction of the plant or implement any other provisions of the concession agreement until negotiations and the agreements have been finalized.”
In response to the claims that the group is only exploiting Liberian resources for export to Europe, the company notes the separation between BR Power and BR Fuel. BR Fuel contracts directly with private landowners or rubber concessionaires to clear non-producing rubber trees and to ensure that at least one tree is replanted for every three removed. Currently, the division is selling the converted woodchips to European power companies; and while the group would supply rubber wood biomass to BR Power to generate clean electricity, BR Power must first come to a concession agreement with the government.
The company said, “BR Fuel, like other service provision and trading companies, does not have and does not legally require a concession agreement to operate in Liberia.”
The company said its export volumes are currently less than 0.5% of the available rubber wood per year, “leaving plenty of rubber wood to supply the power plant and for other uses.” The division employees about 720 Liberians and has generated an additional 250 jobs by outsourcing activities to locally-owned companies. The company said: “BR Fuel has replanted 34 smallholder farms and contributed to the rejuvenation of over 4,000 hectares of rubber plantation. In 2011, BR Fuel spent over $19 million on supplies and services from Liberian registered businesses.”
Public relations Momolu Vannie told Alternative Energy Africa that the $112 million loan was granted for the construction of the power plant, but the money would not be disbursed until the concessional agreements had been approved by the government. Vannie said: “Please note that while the export of woodchips to European or other markets has always been one of BR Fuel’s business activities, the priority for the overall group has always been to use the biomass locally to provide an affordable, reliable, and sustainable source of power in Liberia. However, this can only be done once the plant is constructed, which is contingent on the finalization of negotiations with the Government of Liberia.”
For the documents released by Buchanan Renewables, please email LeAnne Graves directly at lgraves@AE-Africa.com
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