Swedish based EcoEnergy Africa AB is investing over USD 500 million (TZS 800 billion) into a sugarcane plantation and a factory producing sugar, ethanol, and power for the Tanzanian market in Bagamoyo.
The investment is made via its Tanzanian subsidiary Agro EcoEnergy (T) and a special purpose project company called Bagamoyo EcoEnergy Ltd (BEE).
The project will include growing and producing sugar for the domestic Tanzanian market, as well as production of ethanol and power for the communities near Bagamoyo.
The project is expected to generate 130,000 tons of sugar annually for the domestic Tanzanian market, along with 10 million liters of ethanol and 100,000MWh providing electricity to 100,000 rural households.
Construction works have started in March 2014, and production is expected to start in two years.
Per Carstedt, the Executive Chairman of the company, had stated that the project will help reduce import rates for sugar and oil and generate inclusive growth in the surrounding communities, while introducting new technology to the sugar industry of Tanzania.
According to Agro EcoEnergy the current sugar consumption in Tanzania is estimated at approximately 600,000 tonnes per year while the domestic production is only 300,000 tonnes per year. This means that Tanzania has to import sugar for large amount of money.
With a per capita consumption of sugar that is only 30% of EU’s and South Africa’s and 60% of Kenya’s, together with an anticipated rapid population increase, the national consumption is expected to increase substantially requiring increased imports of sugar unless the domestic capacity is augmented significantly.