By Devirupa Mitra, IANS
Bogotá : Colombia’s flourishing green fuel programme, which is set to become even greener, has Indian roots. Pune-based Praj Industries has outfitted all the five sugar mills that produce the country’s ethanol that is then blended with gasoline.
In 2005, Colombia started to dispense gasoline with 10 percent ethanol in cities with more than 500,000 residents, as a response to rising fuel import bills and inspired by the example set by the world’s largest ethanol producer, Brazil.
Two years later, with the second most advanced ethanol programme in South America, Colombia has drawn up bigger plans to double its current ethanol production and build eight more plants to meet its new target for 20 percent ethanol blend in motor fuel by 2012.
Foreign companies have already shown interest and entered into joint ventures with Ecopetrol, the Colombian national oil company, to build eight more plants that will increase the production from the current level of 800,000 litres to 1.6 million litres per day.
But that’s in the future. All of Colombia’s current ethanol production is from five sugar mills in the western province of Valle del Cauca – outfitted entirely with technology and machinery from Praj Industries.
The leading Indian bio-fuel technology company, with a market capitalisation of $1 billion and presence in 40 countries, Praj had ventured into South America in 2000 with Bogota as its centre of operation.
Three years after its arrival, Praj bagged a lucrative contract to start the country’s ethanol fuel programme, against stiff competition from Brazilian and American companies.
“We got it because we were the only company providing end-to-end comprehensive services,” Praj’s Vinati Moghe told IANS from Pune.
The ethanol fuel programme has partially begun to kick start the economy in the countryside around Cali that had in earlier decades witnessed fierce fighting between leftist guerrillas and security forces.
“We introduced the ethanol programme, firstly to reduce the import of gasoline,” Hector Manosalva, Colombia’s presidential advisor on oil, told a visiting IANS correspondent. “But we also had an agro-industrial objective, as it will increase employment.”
The order was to entirely outfit five sugar mills located around the city of Cali in Colombia’s sugarcane belt, ranging in capacity from 100,000 litres per day to 300,000 litres per day.
“The entire machinery for the five plants was transported from Mumbai by a chartered ship,” Moghe said.
At the peak of project execution, Praj had about 25 employees from India based in western Colombia. After each of the plants was commissioned, the last in May 2006, Indian employees stayed on for six more months to provide onsite training.
While Praj now has only a single representative in Bogotá, any assistance can be provided from India through an online monitoring system.
“We had set up an Internet-based service which monitors the plant, so that sitting here in India, we can diagnose the problem,” said Moghe.
So far, however, there has not been any need to activate the assistance programme.
Interestingly, the Indian-origin co-founder of Sun Microsystems-turned-venture capitalist Vinod Khosla had acquired 10 percent stake in Praj in April 2006, as part of plans to promote green fuel across the world.
The five plants are however not adequate to meet the mandate for 10 percent fuel mix. Out of the requirement for 1.2 million litres per day from 54,000 hectares of sugarcane cultivation, Colombia is only generating 800,000 litres per day, extracted from 40,000 hectares of sugarcane crop.
Now, it has already made concrete plans for eight more plants to produce ethanol mostly from sugarcane, but also from unconventional sources like beet and cassava.
“We are open to foreign cooperation,” said Manosalva, pointing out that the government was giving tax incentives to set up new ethanol plants.
In fact, the new plants will not just meet the domestic demand, but is also set to become a new export industry.
With the US increasingly moving towards bio-fuels, Colombia will also be exporting 750,000 litres per day to the American market under a bilateral free trade agreement.