US$10b biofuel projects to be signed tomorrow

Dozens of companies are scheduled to sign agreements to develop 50 biofuel projects across the country worth more than US$10 billion on Tuesday to support the government?s program of reducing the nation?s use of fossil fuel.

Al Hilal Hamdi, chairman of the National Team for Bio-Energy Development, told reporters on Monday the 50 projects include the development of biofuel crops plantations and biofuel processing plants.

He did not name projects.

Hilal said with the projects, Indonesia expects to be able eventually to reduce the use of fossil fuel by 10 percent in 2010.

The crops that will be developed to produce bio-fuel include oil palm, jatropha curcas, cassava and sugar cane.

He said some 6.5 million hectares of land would be made available for the development of bio-fuel crops. Thus it would provide employment for about three million workers and boost rural economies.

Of the 6.5 million hectares, three million hectares will be developed for oil palm, 1.5 million hectares for jatropha curcas, 500,000 hectares of sugarcane and 1.5 million hectares for cassava.

Investment per hectare is estimated at Rp 30 million for oil palm, Rp 15 million for sugarcane, Rp 3 million for jatropha curcas and Rp 3.5 million for cassava.

The projects include the development 11 biofuel processing plants, which are expected to produce a total of 187 million liters next year and 1.3 billion liters by 2010, or equivalent of the country?s total fuel consumption of 41 million kiloliters in 2005. Therefore, up to 2010, the use of fossil oils for the transportation sector is expected to be cut by 10 percent and by 50 percent in the power generation sector.

Hilal said that the biofuel development projects need an estimated investment of Rp 100 trillion (US$10.8 billion) within the next five years, according to Hilal. (Godang)