Prospect of Bio-fuels in Sierra Leone

Executive Summary

Sierra Leone is a major location for tropical plants such as cassava, palm oil and sugarcane. Its favourable weather conditions, plentiful supply of resources, large arable lands and assets to irrigation assets make it an ideal location for biofuel investment. The potential market for biofuel within the country is extremely small due to the costs of biodiesel and the lack of Government incentives; however its location on the coast of Africa and its vicinity to Western and African countries means offsets this drawback. The most suitable location for an ethanol plant in Sierra Leone is Kambia and for biodiesel production the ideal locations are Pujehun and Kenema. The proposed processing route for the production of cane sugar is fermentation. The recommended process for biodiesel production is an enzymatic transesterification process. This method is adopted to minimize the environmental impact of production. Nevertheless there are still several environmental concerns that arise during the production of biofuels. The most important of these are food security issues. Although the paper concludes that prospects for biofuels are large in Sierra Leone, investors must adopt an emergent strategy to minimise the risks.

Biofuels present a novel opportunity for African countries. They can contribute to energy security, gross domestic product and rural income. They are also important for national export growth. Demand for biofuel is estimated at 170 million litres per annum; however annual demand is projected to reach 230 million by 2020. This essay reviews prospects for biofuels in Sierra Leone. It explains the key issues that arise in the introduction of a biofuel plant in Sierra Leone. These issues are discussed are: resources, policy measures, market opportunities, location and size of plant, processing routes, and finally the environmental and social issues.

Sierra Leone’s location at the heart of Western Africa makes it an ideal home for tropical plants such as palm oil and sugar cane. The country’s positive agro-climatic condition, a cultivable agriculture area of 4.4 million hectare and its abundant supply of bio-resources means that it can produce biofuels within the quantity required to compete globally (SLIEPA; 2010). At 7˚-10˚ north of the equator, the country has the perfect weather conditions (high annual average rainfall and a mean temperature of 27˚C) for growing feedstock such as fresh water algae, sugar cane, palm oil, molasses and cassava. Figure 1 shows the average annual temperature and rainfall. Between January and March, the average rainfall falls below the required amount but this deficit can be overcome by irrigation, which can be provided by any one of the country’s 9 river bodies (SLIEPA). illustration not visible in this excerpt

Figure 1: Annual rainfall per year compared to other African countries (SLIEPA; 2010)

Among the resources found in the country, sugarcane is believed to be the lowest cost feedstock with an average cost of $0.35 (Mitchell, 2011). Sugarcane offers several benefits as a feedstock: sugar that can be converted to ethanol; the by-product of the extraction process bagasse can be used to fuel the factory; high sugarcane yields averaging about 85 t/ha; and high ethanol yields of approx. 8000 litres of ethanol per hectare of ethanol. The fact that the country has a lack of high quality sugarcane is a disadvantage however suitable international varieties such as cane Q88 and S13 can also be used (coastal and environmental service; 2009).

Palm oil tree is also suitable for use as a bio-resource for biodiesel production or for use as a straight vegetable oil. A single tree can reach 20 metres. It is the second highest yielding bio- resource in the world with an estimated 3,136 litres of biodiesel per hectare. The drawback of using palm oil as a fuel source is the cost relative to sugarcane ($.20 higher than sugarcane) (Mitchell, 2011). Another limitation of palm oil is the high cloud point of biodiesel sourced from palm oil trees. This means that it can only be used in warmer countries and during the summer seasons in colder countries.

The Government of Sierra Leone has expressed strong support for biofuel investments in the country. State support is demonstrated by the provision of adequate frameworks such as a zero per cent corporation tax law, long lease periods and cheap cost of land (figure 3) and free use of water resources. Labour costs are also competitive at $2 to $5 dollar per day (figure 2). A key motivation for investment is the fact that Sierra Leone also has duty free access to the USA and EU under everything but arms initiative (SLIEPA; 2010). Another investment incentive is the availability of funding from development finance institutions such as the African Development Bank and the Belgian Development company. Swiss company Addax Bioenergy recently received a total of $142 million funding for its sugarcane biofuel project in Sierra Leone (Bio Invest).

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Figure 2: Average labour costs per hour compared to other competing countries (SLIEPA; 2010)

Another driving factor for investment is the potentially large market for biofuel in Sierra Leone. Ethanol can be used to replace charcoal, wood and kerosene. The market size for this in Sierra Leone is great because about 80% of households in Sierra Leone use these products as a primary fuel source (Mitchell; 2011). The market in Africa if bioethanol replaced 10% of the total market of the energy consumption for cooking is roughly 3 billion litres of ethanol (Mitchell, 2011). Second, the by-product of ethanol, bagasse can also be used as fuel in power stations to provide electricity for the factory and neighbouring villages. The expected profits are high because electricity in the country costs about $0.54 per KWh and there is a current deficit of 300 MW (SLEIPA; 2010). The biggest demand for biodiesel is for use as liquid transport to replace gasoline and diesel. The gasoline market is approx. $3 billion and consumption was 134T gallons per year (Algeno Biofuels: 2011). If effective Government policies are introduced, there is a potentially large market for biodiesel and ethanol as fuel enhancers and substitutes for diesel and petrol. Figure 4 shows the projected demand for biofuel from 2010-2020. The supply deficit by 2020 will be about 46 million litres. There is insufficient demand for biofuels in the country and other African regions, however Sierra Leone’s coastal location and proximity to Western markets means that companies can still access and compete in international markets (Pinto; 2011).

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Figure 3: Total biofuels supply and demand (Pinto; 2011)

The plant size and location are two of the most important considerations in determining the feasibility of a bioenergy plant in Sierra Leone. Kambia is the most suitable locations for growing cane (figure 4) because it is in close vicinity to Freetown port (138 km) and it is located near the Kolente River which provides access to irrigation. These areas have an excess amount of land therefore requiring the least amount of resettlements. They also avoid sensitive wildlife areas such as forests and wildlife habitats (SLIEPA). The ideal locations for growing oil palm in Sierra Leone are Kenema and Pujehun because of their proximity to the Mao River (Figure 5) (SLIEPA; 2010).

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