Swedish Ethanol Chemistry AB (Sekab) has terminated its investment in Tanzania after injecting an estimated $250 million in equity and debt to produce around 100 million liters of ethanol a year. The Swedish alternative energy company has decided to pull out of its ethanol investment which was set to use the output of an immense sugar cane plantation in Bagamoyo, as a result of the global financial crisis.
Kristina Nilsson, communication manager of Sekab, said from Omskoldsvik, Sweden, last week that its projects in Africa, including in Tanzania, will be sold or terminated while its operations in Europe will be sold. “The firm is terminating its investment in Tanzania in view of the current market situation,” she said.
Jan-Olof Backman, chairman of Sekab’s board of directors, said that the company will focus its resources on its profitable core business of green chemicals, diesel replacement fuel, and a cellulose ethanol research program.
Shelving of the investment comes a month after Tanzania secured $3 million from Sweden and Norway to develop a regulatory framework for biofuel production and strengthen the National Biofuels Task Force. The program would have established Tanzania — and neighboring Mozambique — as leaders in the biofuels sector in East Africa.
Sekab BioEnergy Tanzania Ltd. was formed in 2007 as a joint venture between the government of Tanzania and Swedish Ethanol Chemistry, BioAlcohol Fuel Foundation, and the Community Finance Company to kick-start the development of a sustainable bio-energy platform in Tanzania.
