Mumias to start production of ethanol next year, says Kidero

Mumias Sugar Company plans to start production of ethanol by the end of next year.

This is part of projects to help in revenue diversification.

The plant that is expected to produce about 22 million litres of ethanol a year will be the latest addition to the firm’s portfolio.

According to the company, the ethanol will be targeted for sale within the East African Community and Comesa member states.

It already has a co-generation plant and is working on the finer details of a carbon trading initiative at its Mumias factory.

Joins growing list

“We have done an environmental impact assessment and we are optimistic that it will be approved by the National Environment Management Authority,” the sugar miller’s chief executive, Dr Evans Kidero said on Monday.

A consortium of Ecobank and Commercial Bank of Africa will finance the project at Sh1.6 billion.

The company will, however, raise the rest of the Sh3.6 billion total costs from its reserves.

The loan has a term of six years with a two-year moratorium, while its interest rates have been negotiated separately.

The company joins a growing list of local firms that are getting into ethanol production to feed demand to be created by new legislation that requires blending it with fuel.

Ethanol is produced by Spectre International and the government-run Agro-Chemical Company, mainly for export.

Chemilil, Nzoia and Sony sugar companies have plans to start producing ethanol.

Currently, it estimated that production of ethanol in Kenya is slightly over 15 million litres every year against a demand of 40 million litres.

Apart from the common use in alcoholic beverages, it is also an ingredient in fuel blending and an antiseptic and a solvent.

“There is demand for ethanol not only for blending purposes, but other uses too; there is immense potential in the market,” the Mumias Sugar boss said at a signing ceremony with both the financiers and contractors for the project.

Ecobank and Commercial Bank of Africa signed the deal.

Last year, the government through the Energy Regulation Commission (ERC) gazetted the blending of fuel with ethanol.

This was expected to start this month at the Kenya Pipeline Company depots in Eldoret, Kisumu and Nakuru at 10 per cent with petrol.