Frequently Asked Question

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  • Does Tanzania really need to produce more sugar?

    The current sugar consumption in Tanzania is estimated at approximately 600,000 tonnes per year while the domestic production is only 300,000 tonnes per year. This means that Tanzania has to import sugar for large amount of money. With a per capita consumption of sugar that is only 30% of EU’s and South Africa’s and 60% of Kenya’s, together with an anticipated rapid population increase, the national consumption is expected to increase substantially requiring increased imports of sugar unless the domestic capacity is augmented significantly.

  • Why should Tanzania produce Electric Power from sugar cane?

    Tanzania has a shortage of electric power even though only 15% of the households have access to electric power through the national grid. Co-generation of power from the surplus of bagasse from the sugar cane processing is a proven source of renewable power capable of replacing diesel that is currently used to generate power. By following the example set by Brazil and India, Tanzania is in a position to increase renewable power production and to become less dependent on imported diesel oil for power generation. 
The project will enable the electrification of all the surrounding villages and supply renewable power to the grid for up to 100 000 rural houesholds.

  • Why should Tanzania produce Ethanol from sugar cane?

    As Tanzania imports 100% of its oil, approximately 80% of all export revenues 2013 were spent on oil imports. Bioethanol is a proven source of renewable fuel for vehicles replacing gasoline and diesel. Tanzania has a great potential to become less dependent on imported oil and other fossil based power, as well as becoming a net exporter of value added agroindustrial products. Tanzania could also increase ethanol usage by replacing charcoal and fire wood for cooking. In addition, Tanzania is currently, according to FAO, losing approximately 400 000 ha per year in deforestation, primarily caused by the production of charcoal and firewood. It is estimated that if 60 000-80 000 ha were dedicated for sugar cane for ethanol production, if produced with the same efficiency as expected by the Bagamoyo project, it would generate enough ethanol to replace all charcoal currently consumed in Tanzania.

  • What are the social and economic impacts of the Bagamoyo project?

    • Direct employment of approximately 2,000 persons.
    • Through the outgrowers scheme (3,000 – 4,000 ha) an estimated further 1,500 – 2,000 persons will be employed.
    • With indirect effects included, an estimated total of 15.000-20.000 new jobs are expected to be created.
    • The outgrowers schemes is estimated to generate more than US$10 million per year in revenues to the local communities.
    • The project will bring improved skills and know-how in agriculture.
    • Introduction of a good health care system for employees and dependants will strengthen the existing local health care structure.
    • The project with its employees and the outgrowers scheme will create a new market for locally produced goods and services.
    • The project will give a major boost to the public finance in form of tax revenues.
    • The project will increase the power supply and primarily replace diesel generated power.
    • An investment of this scale will naturally have a large indirect impact on the communities and surrounding villages to the project. Public processes have already started to anticipate housing and infrastructure needs in order to avoid the development of informal land ess sustainable settlements.

    Housing: EcoEnergy is planning for an off-site housing model with the aim to maintain and integrate the vast majority of Bagamoyo Project employees into the existing communities. As a majority of the employees are expected to come from the surrounding villages they will be encouraged to continue living within their original social structures but will be supported with housing allowances in order to improve their housing conditions.The ambition is to strengthen the existing social structures in the surrounding villages and to trigger new growth points by providing the Bagamoyo Project employees and their dependants with the opportunity to obtain homes and to use schools, clinics and other local facilities regardless of whether they continue their employment with the project.

    Education: In spite of a high population growth in the Bagamoyo District, there are currently sufficient places for primary school students in public schools.  Furthermore, the District is dealing with secondary school quality reforms as part of a wider national Education Sector Reform Programme which is receiving strong support from development partners.  The private sector role is to support the public process with information needed for proper planning of education needs. The project company will secure education for dependants of employees through dialogue with education authorities, private school providers and other educational institutions.

     Healthcare & Medical Facilities: Based on continuous dialogue with Bagamoyo District regarding expected changes in the communities and the consequences on the demand for medical services, it is evident that improvements are needed in current public plans as a result of the planned investment. The Project plans to establish in-house healthcare facilities in the form of an occupational health clinic with the emphasis on prevention and awareness programme, as well as an onsite mobile clinic, equipped for minor injuries and diseases that in emergencies can operate as an ambulance. The Project is also looking at linking employees to the National Medical Insurance Scheme to make use of the available medical care as a starting point, while urging for improved medical facilities at these service points.

  • Who is the owner of the land where Agro EcoEnergy’s Bagamoyo project is developed?

    The project will mainly use land in the district of Bagamoyo that earlier belonged to the Government of Tanzania. The area consists of an abandoned state owned cattle ranch that has not been in use since 1994.

  • What will happen with the small-holders who live close to the farm?

    • From the very beginning small-holder farmers will be invited to join a comprehensive development programme. The project is designed to create opportunity for the local farmers to supply sugar cane through a comprehensive outgrowers programme. This will give work to an estimated 1,500 small holder farmers.
    • Approximately 2,000 persons will be directly employed by the project company whereof preference will be given to the local population.
  • What studies have been and will be performed to measure the impact of the project?

    • The bank consortium has commissioned a number of due diligence studies with both external and internal experts. These include studies on Social and Environmental Sustainability, Industry and Agriculture as well as on future market and national demand and supply aspects. These studies do not belong to EcoEnergy.
    • The bank consortium will further assign a number of the experts that have evaluated the project to follow the project and its operations as long as they provide debt capital to the project company, assuring that the company is operated correctly and in accordance with the Development Banks requirements.
    • Further to the banks monitoring programme, the Stockholm Environment Institute (SEI), together with a number of local Universities and Government Institutions intend to follow and monitor the project over a ten year period in order to build solid scientific knowledge on a number of aspects such as the long term effects on:

      • Livelihood changes.
      • Net effects on GHG emissions and energy usages.
      • Water and nutrient resource management.
      • Ecosystem services and multifunctionality of landscapes.

  • What is the status of the projects` Environmental and Social Impact Assessment report (ESIA)?

    • An ESIA for the original project concept was initiated in August 2007 by ORGUT Consulting AB of Sweden in conjunction with Ardhi University (Dar es Salaam). In July 2008 a draft ESIA was handed in for review to the National Environment Management Council (NEMC). Adhering to the regulations, NEMC convened a technical review in the second half of August 2008 and after this review a number of questions and clarifications were requested. The response to the questions and clarifications was coordinated by Ardhi University and the final version ESIA was submitted to NEMC in December 2008.
    • The ESIA was once again reviewed by NEMC and their recommendation was handed to the Vice President’s Office and the Minister of Environment for approval. The Environmental Certificate was issued 3rd of April 2009. 
    • An update of the ESIA was conducted by Ardhi University in 2011 to take into consideration the latest modifications done to the project design and to ensure compliance with IFC/AfDBs Guidelines and Policies for conducting Environmental and Social Impact Assessments. 
  • Does Agro EcoEnergy follow international laws and regulations?

    Yes, the project follows ILO core labour standards. During project design, construction and operation, all parties will be required to sign up to Agro EcoEnergy´s Code of Conduct, and will follow the mitigation and monitoring requirements of the ESIA and the Environmental Management Plan (EMP), Occupational Safety Management Plan (OSMP) and the Social Management Plan (SMP) structured in accordance with the requirements of the international environmental and occupational health & safety standards ISO 14001 and OHSAS 18001. 

  • Will the actual implementation process of ecological and social sustainability be audited?

    • EcoEnergy will carry out internal and external auditing to ensure project sustainability. The bank consortium will assign a number of experts to audit the project and its operations as long as they provide debt capital to the project company, assuring that the company is operated currently and in accordance with the Development Banks requirements.
    • Further to the banks ausiting programme, the Stockholm Enviornment Institute (SEI), together with a number of local Universities and Government Institutions intend to follow and monitor the project over a ten year period in order to bulid solid scientific knowledge on a number of aspects such as the long term effects on:
    • Livelihood changes.
    • Net effects on GHG emissions and energy usages.
    • Water and nutrient resource management.
    • Ecosystems services and multifaunctionality of landscapes.

  • Is Agro EcoEnergy part of what is often referred to as land grabbing?

    • No, Agro EcoEnergy Bagamoyo will obtain access to the land that will be used for the sugar cane estate in a transparent process according to which the Tanzanian government together with local communities become a 25% long term shareholder of the company in exchange for the land.
    • This model, of equity in exchange for land, is applied for the first time in Tanzania and is now intended to serve as a model for a new national policy relating to large-scale land investments in Tanzania in agriculture or forestry.
    • Approximately 3,000 – 4,000ha of the surrounding village land will be used by the small holder farmers as outgrowers for growing sugar cane and will be sold to Bagamoyo EcoEnergy. The village land however will remain in full ownership and in control by the villages and the new legal entities they are expected to set up in respect of such ownership.
  • What are the consequences if the project would not materialize?

    If the project would not materialize, the project’s public benefits such as increased revenue to the government, improved infrastructure, introduction of a new cash crop and thousands of new job opportunities will not be realised. This would also aggravate the current domestic edible sugar and power shortages and interrupt the initiated process of replacing imported fossil fuel with domestically produced renewable fuel. In addition, if the on-going land abuse around the project area were to continue the remaining pockets of valuable biodiversity currently in the area would be decimated by the rapidly increasing unsustainable charcoal making and hunting (poaching).