Africa Becoming a Biofuel Battleground

Western companies are pushing to acquire vast stretches of African land to meet the world's biofuel needs

By Horand Knaup

Western companies are pushing to acquire vast stretches of African land to meet the world's biofuel needs. Local farmers and governments are being showered with promises. But is this just another form of economic colonialism?

Everything will turn out alright. Correction: everything is going to get better. There will be new roads, a new school, a pharmacy, even a proper water supply. Most of all, there will be jobs—5,000, at the very least. "If there are jobs for us, then it's a good thing," says Juma Njagu, 26, who hopes to be able to leave his meager existence as a planter and charburner behind soon.

Njagu lives in Mtamba, a village of about 1,100 souls in Tanzania's Kisarawe district, about 70 kilometers (43 miles) south-west of Dar es Salaam, the capital and largest city. Mtamba, accessible by dirt road, is a place where people scrape by on a bit of farming, a bit of fishing and the production of charcoal. There isn't much else in Mtamba.

That could change if the British firm Sun Biofuels goes ahead with plans to produce biodiesel fuel from "Jatropha curcas," an energy plant with a high oil content, which it hopes to plant on Kisarawe's farmland.

The Tanzanian government has granted the British firm the use of 9,000 hectares (22,230 acres) of sparsely populated farmland, or enough land to cover about 12,000 soccer fields, for a period of 99 years—free of charge. In return, the company will invest about $20 million (€13 million) to build roads and schools, bringing a modicum of prosperity to the region.

Sun Biofuels is not alone. In fact, half a dozen other companies from the Netherlands, the United States, Sweden, Japan, Canada and Germany have already sent their scouts to Tanzania. Prokon, a German company known primarily for its wind turbines, has already begun growing jatropha curcas on a large scale. It expects to have 200,000 hectares (494,000 acres)—an area about the size of Luxembourg—under cultivation throughout Tanzania soon.

A gold rush mentality has taken hold—not just in East Africa but across the entire continent. In Ghana, the Norwegian firm Biofuel Africa has secured farming rights for 38,000 hectares (93,860 acres), and Sun Biofuels is also doing business in Ethiopia and Mozambique.

Kavango BioEnergy, a British company, plans to invest millions of euros in northern Namibia. Western companies are turning up in Malawi and Zambia, where they plan to produce diesel fuel and ethanol from jatropha curcas, palm oil or sugar cane. Foreign investors have their eye on 11 million hectares (27 million acres) in Mozambique—more than one-seventh of the country's total area—for growing energy plants. The government in Ethiopia has even made 24 million hectares (59 million acres) available.

The consequences of this boom are dramatic. Experts agree that the worldwide push to grow energy plants is on overwhelming factor in the global explosion of food prices. According to one study by the World Bank, as much as 75 percent of the increase could be attributable to this change in the types of crops being farmed. Many farmers in industrialized countries are more than happy to accept government subsidies for corn or rapeseed, but this comes at the cost of the cultivation of wheat, potatoes and legumes.

Oil plants are not competing with intensively farmed land in Africa—yet. Investors argue that the land they are using is uncultivated or underused. But rising food prices and population growth will also increase pressure in the southern hemisphere to convert unused land to agricultural use.

For investors, growing energy plants in Africa is highly profitable. Crude oil will become scarce in the foreseeable future, so that easy-to-produce biofuel comes at just the right time. At an estimated annual yield of 2,500 liters per hectare, Sun Biofuels is in it for the long haul in Tanzania. Production becomes profitable as soon as the price of a barrel of crude oil exceeds $100 (€69) on the world market. A barrel currently goes for just over $100.