Announcement of Eight Million Seventy Thousand US Dollars in Malawi Project to Produce Fuel from Molasses on February 3, 1981

International Finance Corporation 1818 H Street. N.W. Washington. D.C. 20433, U.S.A. • 202-4 77-1234 IFC Press Release No. 81/32 Tuesday, February 3, 1981 $8,7 Million Malawi Project To Produce Fuel from Molasses An $8.7 million venture to produce ethanol fuel from molasses will provide Malawi with the equivalent of up to 10 percent of its gasoline needs. The pro- ject is being implemented by a new firm, Ethanol Company Limited, which will use the molasses by-product of Dwangwa Sugar Corporation Limited to produce some 1.3 million gallons of ethanol (anhydrous alcohol) for blending with gasoline. The sponsor of Ethanol Company is the Oil Company of Malawi (1978) Limited (OILCOM), the principal ma.rketer of petroleum products in the country. The tech- nical partner is Jager and Associates, a consulting firm experienced in ethanol plants. OILCOM is investing $844,000 in equity and Jager and Associates, $281,000. Other equity investors are the Investment and Development Bank of Malawi Limited • (INDEBANK), $638,000; Dwangwa Sugar, $263,000; the International Finance Corporation (IFC), an affiliate of the World Bank, $263,000; and the German Development Company (DEG), $525,000. DEG, $500,000. INDEBANK is providing a $1,862,000 loan; IFC, $1,700,000; and Suppliers' credits of $1,900,000 complete the financial plan. Malawi has no domestic oil production and has been severely affected by the rising cost of fuel. In addition, i~ is a landlocked country and supplies from the coast are erratic. The ethanol to be produced will help alleviate this dependency on imported fuel and save about $1.7 million a year in foreign exchange. The project will be located next to Dwangwa Sugar's mill on the western shore of Lake Malawi. It will utilize surplus steam and electricity generated by the sugar company as well as the molasses it produces. Production is expected to begin in late 1981 and some 19,500 metric tons of molasses will be processed annually by 1984. The project is IFC 's second in the production of alternative fuels from biomass. The Corporation earlier supported a Brazilian project to produce alcohol from cassava root. • [Any inquiries strictly relating to IFC's participation in this project should be directed to the IFC Information Office, 1818 H Street, ~.W., Washington, D.C. 20433, Telephone (202) 676-0394.]