Rwanda abandons $35m biodiesel pilot project
Posted Sunday, February 12 2017 at 12:10
- More than $35 million was initially invested in setting up the pilot plant for biofuel mass production plant, a diesel station and a bus, but these facilities have not been put to use in a long time.
- Government says has realised the project is not viable as source of raw materials and the high cost of production are constraints.
- Meanwhile, the government had considered turning the plant into an industrial research centre and put up some of the facilities for sale to recoup a portion of the investment, but none of these ideas has taken place so far.
Taxpayers are losing unknown amounts of money in non-operational industrial equipment of the biodiesel production project whose fate still hangs in the balance four years later.
More than $35 million was initially invested in setting up the pilot plant for biofuel mass production plant, a diesel station and a bus, but these facilities have not been put to use in a long time.
Officials of the National Industrial Research and Development Agency (NIRDA) told Rwanda Today that the government decided to abandon the project after realising it was not viable.
NIRDA director-general Joseph Mungarurire cites difficulty in finding raw materials and the high cost of production as having acted as constraints.
“You cannot tell the government or investors to put money in a project that is not viable. And a project that produces biofuel at Rwf1,000 a litre when fuel sells at Rwf800 a litre or even less,” said Mr Mungarurire, who blamed the difficulties on poor planning.
While projections showed the country had potential to grow a significant amount of bio-crops like Jatropha to sustain production, NIRDA said it was later discovered that the climate is not suitable for the crops needed.
There were also concerns over a shortage of land for farming the crops in order to maximise food production. Mr Mungarurire said scientists made a mistake with the feasibility studies, which he said was more theoretical than practical.
Meanwhile, the government had considered turning the plant into an industrial research centre and put up some of the facilities for sale to recoup a portion of the investment, but none of these ideas has taken place so far.
NIRDA officials cited challenges in finding buyers, while studies looking at the best way to put the plant to use are yet to conclude.
It was not established how much losses taxpayers have incurred, so far, four years later, even as the equipment lies idle and keeps losing value daily yet requires money for maintenance.
For instance, the parked biodiesel bus estimated to be valued at Rwf50 million has failed to attract buyers at auctions and could be undervalued as its accessories get rundown as more time passes.
“We can push researchers to quickly come up with a suitable conclusion and there has been discussion with SOPYRWA regarding the use of the plant to process its industrial waste. The bio-diesel bus still needs another valuation after buyers who had shown interest failed to show up in a previous auction,” said Mr Mungarurire.
Similarly, NIRDA is under pressure to relocate the plant, which is currently located in the residential area of Kicukiro District in Kigali, where the Special Economic Zone industrial park is. The relocation requires a huge sum of money, which the institution is having difficulty in raising.
Initial studies had suggested that the project would help the country gradually reduce its heavy reliance on imported fossil fuel and thus avoid the effects of price fluctuations.