The Japanese company Itochu and the Brazilian Petrobras will carry out a project for planting 150,000 hectares of sugarcane and oleaginous plants for biodiesel production. It will be the largest irrigation work in northeastern Brazil. The cane will be used for the production of alcohol for the Japanese market.
The project is of colossal dimensions. It is the largest irrigation work in northeastern Brazil, at 500 kilometres of extension. In all, 150,000 hectares (115,000 in the state of Pernambuco, and the remainder in the north of the state of Bahia) will be turned to planting. For a long time, the so-called Canal of the Savannah has been but a dream to the population of the northeast. But an agreement signed between the Japanese trading company Itochu and the Brazilian state-owned oil company Petrobras was the first step for making the project come true.
The agreement provides that the 150,000 hectares will be turned to the planting of sugarcane for production of alcohol fuel, and of other cultures for production of biodiesel. The production of ethanol and biodiesel will cater to the expanding Japanese market.
Annually, Japan consumes 400 million litres of alcohol, with a 3% rate of addition of the fuel to gasoline. The Japanese law forecasts that the rate should increase up to 15%, due to international commitments for reducing emission of pollutant gases into the atmosphere. Thus, alcohol consumption will rise to 1.5 billion litres. Itochu, also in the field of fuel supply, currently operates 2,200 stations in Japan.
The memorandum of understanding that was signed analyses the best way for catering to the Japanese market. The executive project for the Canal of the Savannah, at an estimated cost of 56 million Brazilian reais (US$29.3 million), will have an initial investment, by Itochu and Petrobras, of 20 million reais (US$10.4 million). The public-private partnership also counts on the participation of the São Francisco and Parnaíba Valley Development Company (Codevasf), which collaborated with 16 million reais (US$8.3 million), and from the state and federal governments, which will contribute another 20 million reais from the Growth Acceleration Program (PAC) of the Brazilian government.
On June 15, in a meeting with the governor of the state of Pernambuco, Eduardo Campos, the minister of Regional Development, Geddel Vieira Lima, warranted funding for the construction work of the Canal of the Savannah, estimated in US$1.2 billion.
According to the president of the Union of the Sugar and Alcohol Industry of the Pernambuco State (Sindaçúcar-PE), Renato Cunha, after the implementation of the irrigation project, the state will have an additional production of 10 million tonnes of cane. Presently, all of the 16 million tonnes produced come only from coastal areas.
To Cunha, agroenergy is a promising field, and the state is now witnessing a new phase. “Being able to use cane bagasse to produce ethanol and biodiesel is a great opportunity, because this way we are managing to attract foreign capital,” he said. According to him, the Itochu is interested in the project because Japan intends to increase the share of clean fuels in its energy matrix. “Bio-fuels are renewable and less pollutant than fossil fuels,” he claims.
To the engineering director at the Codevasf, Clementino Coelho, the aim is to also benefit the families of small farmers. In the region, 50,000 direct jobs will be created. “We will map the appropriate areas for each type of specific culture. There is lots of fertile land in conditions of serving the agricultural sector, but it is not explored due to lack of water,” he explains.
At last, the interior of the state of Pernambuco will become viable for expansion projects, and capable of receiving investment from the public and private sectors. The Canal is going to benefit 16 municipalities in the state of Pernambuco, reaching the margins of Lake Sobradinho, in Bahia.
Source: Brazil-Arab News Agency ANBA, 2007-06-19.