UN Division for Sustainable Development

Case Study Detail Record

Organization type:	Intergovernmental Organization

Name of Organization:	The Renewable Energy and Energy Efficiency Partnership (REEEP)

Name of Focal Point:	Binu Parthan

Initiative Title:	Facilitating Access to Finance for the Biodiesel Industry in Southern Africa

Internet links:	http://www.reeep.org/index.cfm?articleid=1397&parentid=915

Scope:	Regional: - Africa

Status:	Ongoing

Timeframe:	Start: 2006 End:

Lead Institution:	African Sustainable Fuels Centre (ASFC)

Stakeholders/Partners:	REEEP, WISIONS/SEPS

Relevent issues:	- Renewable energy including hydro power

Objectives/Challenges:

Objective:
To assist small and medium enterprises (SMEs) gain access to institutional funding for biodiesel production in SADC countries with a focus on Zambia, Lesotho and Tanzania.
Challenges:
• Little or undeveloped government policies on biofuels
• Little or no experience of biofuel industry within financing institutions, particularly at small scales
• Risk of falling oil prices to the sustainability of biofuels production

Lessons Learned:

A balanced policy framework and proper business planning are critical to the success of bio-fuel projects in Southern Africa.

Policy Options:

Business planning resources and support for small-scale biodiesel production in southern africa available through the helpline - website and telephone.

Summary:

Biodiesel is one of the preferred biofuel options in Africa because it is economically viable at small scales, draws on Africa’s untapped agricultural potential, maximises employment benefits and its manufacture requires low technology and relatively low capital inputs. However, stimulating small-scale production requires improved business planning support and better access to finance. In the context of distributed generation of RE, small-scale biodiesel production coupled with localised biodiesel use is a package that requires a relatively small investment and modest levels of management.
Job creation assessments indicate that a small (1 million liter per year) biodiesel facility processing locally-grown feedstock will generate and secure 50-100 jobs. The outputs of this project would facilitate viable businesses and would therefore have a positive impact on poverty reduction and quality of life in agricultural and peri-urban areas of the target countries, whilst assisting host countries to attain a greater degree of energy security.
This project seeks to support this process by providing tools and support to facilitate the business planning process as well as accessing finance that will allow these benefits to be realised.