Afrinol Holdings Limited was established in Kenya by Robert W. Muchiri, a Kenyan citizen with over 20 years of experience in agriculture and renewable energy industries project development. Mr. Muchiri is currently managing a 1.000 hectares Outgrowers Sorghum farming scheme.
The company has developed a High-return, Agro- Biorefinery Project based on Sweet Sorghum, which is aligned to the government of Kenya “Vision 2030” goals of increasing enhance food security, promote renewable energies & create rural jobs.
The Tana 3S Syrup / Ethanol project in Tana river county, would achieve Lowest Cost Position resulting from:-
To take advantage of the attractive biomass electricity price in Kenya (100 US$/MWh ex- VAT), the plant will also be equipped with a high pressure cogeneration unit producing 5.5 MW of electricity from bagasse waste. About 2.9 MW will be consumed by the irrigation system, the juice extraction units and the ethanol plant operation, the 2.6 MW surplus will be exported to the grid under a REFIT (Renewable Energy Feed-In Tariff) contract.
The total investment is estimated at 51.5 million US$, which comprises the following parts:
It is foreseen that 25% of investment requirements i.e. 13.0 M US$ will be covered by equity contribution. The remainder of the investment i.e. 38.5 M US$ (75%) will be financed through Equipment Financing (11.6 M US$) & a long-term bank loan.
Tana 3S, as a project, offers a Return of Investment which is considerably higher than others Ethanol/Sugar projects around the World. The higher returns results mainly from:
The Project Internal Rate of Return (IRR) calculated from the financial model reaches 30.9 % under the Base Case Scenario and 18.6 % under the Worst Case Scenario (Grain & Ethanol Prices= Lowest observed price of the last 3 years & 30% reduction of agricultural yields).
For the Investor, the IRR reaches 49.8 % (based on an 80% Dividend Pay-out Rate from 2019-2020). This exceptional return rate is obtained thanks to the dual income stream from grains & syrup/ethanol sales and the graduality of Capital Expenditures.
With the production of Food Sorghum & Soybean Grains, Ethanol from Sweet Sorghum stalks and Electricity from Waste Biomass, Tana 3S is a model for Bioenergy production and GHG reduction which does not give rise to controversy regarding food to fuel arable land conversion.