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The Business Case for Cogeneration on Sugar Estates in Africa"

Compiled by

AFREPREN/FWD


Abstract

There seems to be a clear demand for clean energy initiatives across Africa, and the sugar industry has the potential of making significant contributions towards this end. Case studies show that there is a business case for commercial sale of electricity from sugar mills, however there are a considerable number of factors that could prevent such development. After outlining some of the general contextual factors of investment in Africa, some specific parameters regarding investment in Agribusiness, and highlightings the changing market for sugar products, the paper examines the business case for sugar producers to undertake Cogeneration of electrcity.

In particular the paper argues that while initial investment is difficult to secure, the steady return on a cogenration plant can be a signficant contributor to overall profits. Combine this additional financial income with the indirect and social benefits, and sugar producers would do well to consider co-generation of electricity either for sale to the National Grid (depending on the Feed-in-Tariff), or supply to their surroundings as an Independent Power Producer. The paper concludes with a summary of the key factors that need some action in order to create an enabling environment for Cogeneration development.

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