Copperbelt Energy Corporation, Biofuel production, Zambia

Copperbelt Energy Corporation seeks to expand its biofuel production by including smallholder farmers in its supply chain. This will create income opportunities for farmers from the sales of jatropha, castor seeds and other forms of oil seeds.

 

The inclusive business initiative

As part of their renewable energy business unit, Copperbelt Energy Corporation Plc (CEC)set up a biodiesel plant in Kitwe, Zambia. In order to meet the required oil quantities for the plant to make it a profitable part of their business, CEC involves small scale farmers in the production of bio fuel feedstock mainly from soya beans, jatropha castor and other oil seeds. This provides additional income opportunities for thousands of small scale farmers from the sale of agriculture produce. They are now also in talks to acquire a soya bean mill in Kitwe which will not only increase access to more oil seed but also improve profitability of the biofuels operation through the sale of the highly valuable soy seed cake.

Commercial drivers

CEC’s main commercial driver behind this venture is to scale up the company’s biodiesel production in order to make it a profitable business activity within the company’s renewable energy unit. In the short term, CEC aims to reduce its operational costs by blending biodiesel with traditional diesel to be used for its vehicle fleet potentially creating savings of 20% on CEC’s fuel costs.

Development impacts

At the moment, 300 farmers are involved in the supply chain. The project is expected to support up to 1,300 farmers in the production of quality jatropha and castor seed and two co-operative enterprises who act as seed processors.

After harvest (starting in April each year), farmers sell the seeds to seed processing businesses who extract crude oil from the seeds and produce seed cake. Crude oil is supplied to CEC for the production of biodiesel.

Innovation and scale

Seed cake is used to produce organic fertiliser (to be sold back to farmers) and briquettes (to be sold in peri-urban markets as an alternative to charcoal). The latter is expected to contribute to a reduction in charcoal use, and consequent deforestation as well as increase household access to energy for cooking. Glycerol – a by-product from the biodiesel refinery process will be sold back to the seed processors who in turn will use it for the production of soap and industrial detergents as an additional business opportunity.

Positive environmental impacts include the regeneration of disused fields, use of organic fertilizer (increased food security), net reduction of CO2 by using biodiesel and reduction in deforestation.

Objectives of Facility engagement (May 2012)

Support by the Business Innovation Facility focuses on assessing the supply chain and devising a strategy to improve responsiveness.

CEC also receives support in developing a financing plan for its expenditure requirements to include seed storage and oil processing. Lastly support is provided for capacity development of the jatropha and castor seed processors in the value chain who are currently constrained by financial resources to effectively stimulate increased crop production through procurement of substantial quantities.