BAGAMOYO SUGAR PROJECT


Overview

  • Reference: P-TZ-AAG-003
  • Approval date: 23/04/2014
  • Start date: 23/04/2015
  • Appraisal Date: 01/11/2013
  • Status: ApprovedAPVD
  • Implementing Agency: BAGAMOYO ECOENERGY TANZANIA LTD ANDERS BERGFORS, MANAGING DIRECTOR
  • Location: Bagamoyo, Tanzania

Description

The Bagamoyo Sugar Project (BSP) is a 7,800 ha sugarcane plantation that will produce up to:

(i) 125,000 tons of raw sugar for the domestic market;

(ii) 100,000 MWh/year of renewable electricity for the domestic market; and

(iii) 8,000 m3 of fuel ethanol, for the domestic and/or international markets. The project will feature an outgrower scheme of 3 ,000-3,500 ha. BSP will be developed in accordance with the highest environmental and social standards.


Objectives

Produce sugar and renewable energy in a financially, environmentally and socially sustainable manner in order to boost agricultural productivity and economic growth, reduce reliance on imports and expand access to modern energy.


Rationale

Country Rationale: Developing the agriculture sector is at the heart of Tanzania


Benefits

Primary benefits include:

Household benefits Household benefits derive primarily from job creation. Approximately 2,250 new permanent jobs will be created by the project covering both the agricultural and industrial components. Employees will receive substantial benefits beyond salaries including housing, education and medical benefits themselves and dependents. Households in Tanzania will also benefit through better availability and lower price sugar, which is a key item in the food basket (sugar shortages in recent years have led to upheaval).

Infrastructure The BSP will produce roughly 100,000 MWh/year of renewable energy for the national grid and add transmission capacity (40 km line).

Government LHA will contribute to government revenues through various taxes and dividends. Corporate taxes of 30% will be paid following an initial tax holiday. Tax holidays in Tanzania are granted on a case-by-case basis, and the BSP has applied for strategic investor status, which could allow a holiday of up to 10 years. The GoT will also receive dividends directly as a shareholder in the BSP and through TPDC


Key contacts

FUSI Richard - OPSD2


Costs

Finance source Amount
ADBUSD 32,518,845
DeltaUSD 307,439,655
TotalUSD 339,958,500