Posted December 08, 2012 by publisher in Cuba Business.
Rob Sequin | Havana Journal
With no announcement by the Cuban government that I found, Havana Energy CEO Andrew Macdonald announces a $50million investment in a Ciro Redondo sugar mill.
This is believed to be one of the largest foreign investment deals in Cuba in recent years.
He is seen walking through the sugar mill with BBC News correspondent Sarah Rainsford where he talks about how the marabu weed will be converted into biofuel in Cuba.
“The plant will be powered by the marabu weed - which is currently strangling Cuban agriculture after taking over huge swathes of idle farmland. Havana Energy says the project has the double benefit of clearing that land for use again and creating energy for the surrounding area, as well as being more environmentally friendly than diesel. The firm is also planning to export the weed to Europe, as their research has revealed its excellent properties as activated carbon.”
Sarah Rainsford continues…
Drive anywhere in the Cuban countryside and you will spot the marabu lining the road: a dense, woody weed that grows as tall as trees and has invaded vast swathes of agricultural land.
The land-grab began in the 1990s when Cuba was in economic crisis following the collapse of its great benefactor, the Soviet Union. The mighty sugar industry slumped too, and cane fields were overrun by marabu.
But to one British firm, the aggressive weed is less a problem than a valuable resource.
Havana Energy has just signed a $50m (£31m) investment deal to build a renewable-energy power plant in central Cuba, supplying one of the country’s biggest sugar mills as well as the national grid.
During the harvest it will be fueled by sugar-cane residue, known as bagasse. The rest of the year it will be fed with marabu.
“Marabu has a very high calorific level and low moisture, so as biomass it’s very attractive,” explains the firm’s CEO, Andrew Macdonald.
Benefits for all
Harvesting marabu will also address a pressing issue on the island.
“Seventy per cent of the food Cubans consume is imported, which is a national tragedy with their climate and soil,” says technical director Keith Dawson.
“Every Cuban hates marabu so we’re doing a service: not just removing it but also returning the land to farming.”
The deal is a joint-venture with Cuba’s state sugar monopoly and is part of a move by the Communist government to diversify its energy supply away from dependence on subsidized, imported oil from its socialist ally, Venezuela.
“Cuba relies on diesel-powered power stations, which are even less green than coal, very expensive and give-off horrible emissions,” Mr. Macdonald explains, saying his firm’s green energy will also be cheaper.
Now the papers have finally been signed, the British team face their first major test.
Early next year they will import a combination of forestry and construction equipment that they hope can harvest the marabu economically. No-one has managed that yet.
“You can’t underestimate marabu. We’ve brought foresters to look at it and they’ve been confused, and agricultural kit is not strong enough,” says agricultural adviser Julian Bell.
The aggressive marabu plant has a dense structure and hard thorns, says Andrew McDonald
The plant’s woody roots vary in size and are as dense as teak with fierce thorns.
“Usually you just wouldn’t bother. But I don’t know anywhere else with 1.5 million hectares covered in such a good energy source,” he says.
There is another incentive. Research at Strathclyde University has revealed that marabu produces high-grade activated carbon for use in filters - like in Cuban rum production.
Potentially, the carbon could also be used in new-generation fast-charging batteries.
So Havana Energy will bring a reactor to the Ciro Redondo mill next year to trial carbon manufacturing.
In the small town that grew up around the sugar mill, there is a good deal of expectation about the investment. The joint venture should create around 60 new jobs and includes funds to upgrade the dilapidated mill itself, now a century old.
Only one of its three crushing machines are operational, it still has Soviet-era signs and aging east German equipment, and large sections of the roof are missing.
“It’s in a terrible state,” says retired sugar-worker Oberto Vazquez as he passes on his bicycle. “When it rains, it rains more inside than out.”
So for Cuba this venture is not only about sourcing alternative energy.
The government is in the midst of a drive to boost sugar production, cashing in on higher global prices and increased demand from countries like China. It has reopened almost a dozen old mills, targeting 20% production growth per year.
Read the rest of the story from Tackling Weeds
END OF STORY
The January 2011 press release by Esencia/Havana Energy begins “Havana Energy Ltd – part of the Esencia Group of companies - has teamed up with Zerus SA, a company linked to the Ministry of Sugar, to develop a pilot 30MW power plant at Ciro Redondo Sugar Mill, about 400km from Havana, and as a second stage four further power plants. The business will be developed in a joint venture company.”
——————————Havana Journal Comments——————————
To say that deals like this move slow in Cuba would be overstating the speed at which deals like this are done in Cuba.
Also, one educated about doing business in Cuba could suggest that Esencia and Mr. MacDonald do not expect to make any profit from this joint venture. Even though he is saying there are benefits to processed marabu, one could doubt the potential profitability for such a Cuban joint venture.
As the Cuba Standard mentioned in an article last month, “The bigger prize for Macdonald and Esencia is the development of a golf resort near Varadero.”
Esencia wants to build a giant tourist resort in Carbonera near Varadero.
The company is also involved with a Cuba import/export business, the Floridita in Havana and the Floridita in London as well as owning and operating a Cuban travel company.
I wish them well but like most past investors in Cuba, they will invest lots of time and money and will lose both.
On December 08, 2012, publisher wrote:
The video in this article was posted on December 7.
This video http://youtu.be/lN9P8vAEmCo from December 5 shows Sarah and Mr. Macdonald talking about his golf project in Cuba.