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The Prime Minister advised an Israeli energy firm,
HLB Conatz Holding, which requested a 100,000hct
plot in South Omo Zone of the Southern Nations,
Nationals and Peoples Regional State (SNNPR), to
change its original idea of cultivating Jatropha
tree to palm tree development for bio-fuel
production, sources disclosed to Fortune.
The SNNPR Investment Agency had, a week earlier,
signed a Memorandum of Understanding (MoU) with the
company. But the regional state is still pondering
if the fertile land should be granted for jatropha
plantation.
According to sources, Meles was then approached
through SNNPR officials to give his views, and the
PM suggested that the plot would better be used for
growing palm trees as the jatropha tree can be grown
on infertile soils.
The company, the agency and the Israeli company,
which initially came up with the jatropha
development business plan, welcomed the Premier’s
suggestion, sources revealed.
In arid areas with a less than 200mm average
rainfall, a hectare of land can yield 1000Kg of
Jatropha, while in areas with more than 2000mm
average rainfall, it is possible to grow 150 palm
trees per hectare which can yield 5000Kg – 30, 000Kg
palm seeds, according to a study conducted by the
Ministry of Mines and Energy (MoME).
The average rainfall in South Omo area is more than
2000mm and the soil is fertile and that justifies
the PM’s advice.
A study by the MoME states that Ethiopia has 23
million hectares of land suitable for bio-fuel
development and the government has prepared a
strategic document to regulate its operations. The
Bio-Fuel Development and Utilization Strategic Plan
issued by the Council of Ministers in September 2008
underscores that bio- fuel development should be
done in a way that would not affect the lives of
farmers and pastoralists.
According to the strategic plan and data from the
Ethiopian Petroleum Enterprise, Ethiopia annually
spends 87pc (8.6 billion Br) of its export earnings
on the purchase of petroleum, causing the government
to be concerned. Coupled with the anticipated
increase in the demand for petroleum to meet the
likely economic growth in the years to come, the
concern has highlighted the importance of developing
alternative energy sources.
Accordingly, the government is eying bio-fuel
development and jatropha, castor seed and palm tree
as prime choices. The government does not want to
promote maize and other oil seeds for bio-fuel
development, fearing the impact it can have on food
security and food prices.
Nearly 30 companies, of which 10 are at construction
stage, have joined the sector in Ethiopia over the
past two years.
The Mines and Energy Ministry’s study shows that a
litre of oil from jatropha and castor crop can be
sold for 0.45 – 0.76 dollars in Ethiopia, while the
price can go as high as 1.3 dollars in Germany.
Such market situations and the availability of land
and cheap labour enabled the expansion of bio-fuel
development in Ethiopia, an official from the
Ministry told Fortune.
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