China New Energy, Sunbird Bioenergy sign MoU for 2 biorefineries in Africa

Bioenergy engineering firm China New Energy Ltd (LON:CNEL), or CNE, said Friday it has signed a memorandum of understanding (MoU) with Sunbird Bioenergy Africa Ltd for the development of two biorefineries in Africa.

CNE will design the biorefineries to be located in Zimbabwe and Zambia and will supply the key operating technology. Its scope also includes project management and support services.

The MoU was signed at a China-Africa cooperation forum in Johannesburg. It comes after Sunbird, CNE's project partner in Africa, recently signed an agreement with Zimbabwe's government to develop a 120-million-litre (31.7-million-gallon) bioethanol plant.

The Zimbabwe project is expected to use mixed feedstocks including cassava and molasses. The cost over the two-year development period is estimated at around USD 50 million (EUR 45.7m). The plans are construction to start in 2016 and operations in late 2017.

Sunbird is also finalising a deal with Zambia's government to develop a similar project there. The ambition is development to start next year and commercial operations in 2017 to help mitigate Zambia's energy and job shortage.

CNE noted that a number of milestones need to be completed for both projects, including a feasibility study and an environmental impact assessment.

"We maintain our view that Africa provides a long-term opportunity for CNE as the development of its bioenergy industry helps African governments deliver on their goals of energy security, job creation and economic empowerment of rural communities," CNE said.

(USD 1.0 = EUR 0.915)

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