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Sweet Sorghum-Ethanol Development

Sweet Sorghum-Ethanol Development

Tana 3S acquired 15.000 hectares of quality land at Kitangale Ranch next to the Tana river under a 30 years Lease agreement .

  • Each year 2.500 hectares of land will be prepared for high yield sweet sorghum plantation.
  • The full land conversion is expected to be completed by 2020.
  • Sorghum grains will be sold to the Food and Feeds Processors industry in Kenya.
  • Sugar Syrup for ethanol production will be produced from Sweet Sorghum stems in scalable production units.
  • In the first two years, the syrup will be sold to local distilleries.
  • An ethanol fermentation & distillery and cogeneration unit will be installed in 2020, once 10.000 ha. of converted land will be in full sweet sorghum feedstock production.

 Investment Rationale and Key Drivers

  • Kenya suffers from a a structural ethanol & sugar molasse production deficit.
  • As result of high import cost, the price of Ethanol in the Kenyan domestic prices is 30% higher than international prices.
  • Sorghum grain prices are 50 to 60 % higher than in the USA.
  • Global ethanol prices are due to increase as result of raising US imports (sugarcane based ethanol is the cheapest alternative to fill the advanced Biofuel mandate).
  • Sweet Sorghum grain, syrup/ ethanol, beef industry &electricity sales create multiple source of revenue reducing exposure to price fluctuations.
  • Ethanol from Sweet sorghum is 40 to 50 % cheaper to produce than sugarcane ethanol (Cost of cultivation of sweet sorghum is 3 times lower than sugarcane).
  • The investment in syrup production units are scaled to correspond to sorghum plantation area increase.
  • Ethanol production unit investment is realized only once the agro & syrup production operations come up to speed.
  • For agro-industrial investors, Kenya offers unique advantages: a stable economical & political environment, easy access to markets, developed agricultural services & good road logistics.
  • The Tana River region offer some the best land investment opportunities:
  • Top quality soils, 650 mm annual rainfall, high irrigation potential proximity to ports and consumption centers.
  • 3 crops per year under irrigation.
  • Land lease cost is a bargain compared to ethanol producing countries such as Brazil.

Project objectives and philosophy

  • The project seeks returns above 35 % IRR while offering exceptional investment safety.
  • 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.
  • Impact on ecological system & water resources is minimal.