The Mozambique government has signed a US$510mn contract with Central African mining and exploration company (Camec) to support a biofuel project that is set to produce 120mn litres of ethanol a year.


Feedstock for the ethanol will be sugar cane sourced from the Massingir district in the southern province of Gaza. The project, known as Procana, has been granted provisional rights to over 30,000 hectares in the region.


The ethanol will be produced for the domestic and regional market, and the project also aims to produce electricity for local communities and create around 7,000 jobs. Local authorities hope the project will regenerate the Massingir district, a region where many of its inhabitants end up emigrating to South Africa. Under the terms of the contract, Camec is required to start construction of its ethanol factory within the next year. A Brazilian firm has been contracted to carry out the construction, which is expected to take three years.


One major challenge facing the project is accessing adequate supplies of water. The sugar cane plantation will use water from the Massingir dam on the Elephants river, a tributary of the Limpopo river.


Farmers working further down the river are concerned that too much water will be diverted to the Procana project, leaving their rice and maize fields short. These concerns have already been aired in the local press, but so far the government has responded by saying there will be adequate supplies for all parties and the project will be developed responsibly.