Time running out for EcoEnergy?

Has the Swedish-financed ethanol/sugar project in Bagamoyo, Tanzania, finally reached its critical moment?

Sida has declared that it will withdraw its support to the project if the private company EcoEnergy is not able to find capital for its intended investments before 30 April, which should mean that the project turns bankrupt. If on the other hand EcoEnergy is able to raise private capital to finance its operations Sida guarantees bank loans of 600 million SEK.

Meanwhile the Swedish Economic Crime Authority is looking into how the predecessor of EcoEnergy, Sekab company owned by three municipal energy companies in northern Sweden, sold their subsidiary companies in Tanzania to the owner of EcoEnergy for the symbolic sum of 400 SEK.

The details of the perplexing story of how three municipalities in north Sweden came to invest 170 million SEK in growing sugar cane outside Bagamoyo, has been a serial story in newspapers in northern Sweden and also covered in documentary films. Swedish and Tanzanian researchers as well as environmental NGOs have studied the project. I visited the project site in 2008 and wrote about the discrepancy between the management’s high-soaring plans for local development and participation and the scepticism and disappointments expressed by farmers and pastoralists in the area. There were great promises but the company’s activities on the ground left lots to be desired. Corresponding documentation came from the Rufiji area where Sekab also was active.

In April 2009 four researchers from the Stockholm Geography Departments (Annika Dahlberg, Karin Holmgren, Mats Widgren and myself) together with Tor Arve Benjaminsen and Ian Bryceson of the Norwegian University of Life Sciences and documentary film maker Lars Johansson wrote an opinion piece in Dagens Nyheter expressing our concerns about a number of issues regarding the environmental, social and developmental aspects. The proposed sugar cane plantations would push several thousands of small-scale farmers off their land. We used the word land-grabbing which at the time was not yet a household concept.

Over the years academics continued to rise critical questions about the project. The Swedish municipal energy companies eventually pulled out and fired the Sekab director who is the current owner of EcoEnergy. Surprisingly Sida stepped in with loan guarantees to EcoEnergy and has (until now?) retained faith in the project.

The most recent report on developments in Bagamoyo project comes from ActionAid and is available at

http://www.actionaid.org/sites/files/actionaid/take_action_-_stop_ecoenergys_land_grab_embargoed_report.pdf

ActionAid is organising an international petition in favour of the rights of the smallholders and pastoralist who will be evicted if the project is able to proceed with its plans. The petition can be signed at:

http://landfor.org/

Sekab and EcoEnergy have all along had high-level political support in Tanzania and this still continues as recently reported in Tanzanian news media:

http://www.ippmedia.com/frontend/index.php?l=78473

The prospects for EcoEnergy look bleak, as Sida now has decided to pull out if the company cannot raise capital for its investments before the end of April. But Sekab and EcoEnergy have been reported as insolvent a number of times before, and what the situation will be on 1 May remains to be seen.