‘We want sweeter ethanol law’
THE Zimbabwe Energy Council will engage the Energy and Power Development Ministry over relaxation of legislation compelling investors to enter joint ventures with Government if they want ethanol production licences.
The council is of the opinion that Statutory Instrument 17 of 2013 is an impediment to investment in ethanol production.
The body said some investors were fully capable of participating in ethanol production individually and were being put off by SI 17 of 2013.
Responding to questions from The Sunday Mail Business, Energy Council executive director Mr Panganai Sithole said: “Our concern as Zec has been that the governing statutory instrument demands that for one to be given a licence he has to be in a joint venture with the Government of Zimbabwe.
“We do not find any rationale for such a restrictive clause. This clause goes against the dictates of ease of doing business.”
He said oil companies imported over 500 million litres of petrol annually but had never been asked to partner Government.
“So why should ethanol producers be forced to be in joint ventures with Government when they produce just 10 percent of fuel? Secondly, due to current economic challenges, Government does not have significant resources to contribute to their own shareholding,” added Mr Sithole.
The Energy Council said Government should focus more on creating and improving the ease of doing business rather than participating directly in all economic sectors.
Mr Sithole said Government and its parastatals — in this case the National Oil Company — should focus on infrastructure development, adding that Zimbabwe had an acute shortage of storage and handling facilities for ethanol.
However, Energy Minister Dr Samuel Undenge said there was nothing wrong with SI 17 of 2013.
“As I have pronounced earlier, Government has liberalised the ethanol production sector and Sunbird Energy is one of the investors who have since taken the lead by beginning a US$200 million cassava project in Mashonaland Central. So the sector is open for investment,” said Dr Undenge.
Present inadequacies in ethanol supply have seen Government reduce the mandatory blending level of unleaded petrol with ethanol to 5 percent from 15 percent. Government has indicated it is willing to license more suppliers so that blending levels reach 20 percent — as long as they comply with partnership guidelines.
Currently, Green Fuel — a joint venture between the State’s Agricultural and Rural Development Authority and Macdom and Rating Investments — is Zimbabwe’s major producer of ethanol.
The country imports around 505 million litres of petrol.
Green Fuel and Triangle produce around 66 million litres of ethanol combined, and for 20 percent mandatory blending to be achieved, Zimbabwe requires around 101 million litres yearly.