Global Energy Inc. subsidiary in agreement to lease 20,000 hectares of land in Ethiopia to grow castor seeds

Global Energy Inc., an alternative energy company focusing on the processing of solid and energy waste into usable products, announced it has entered into lease agreements with the 'Southern Nations, Nationalionalities and People's Regional State' (SNRS), in Ethiopia, for a 50 year lease of 20,000 hectares of rural land to grow biofuel feedstock. The project offers an interesting overview of what a land lease in Africa could look like.

The land is located in the Semien Omo and Debub Omo Zones (southwestern Ethiopia →FlashEarth) and will be used for the purpose of cultivating castor seeds, which can be transformed into biofuels, biolubricants and a large range of other bioproducts (amongst other things, castor oil is used for the production of high-strength bioplastics superior to petroleum based alternatives - earlier post and here). Land is also leased for the establishment of a seed crushing plant through an existing facility on the property.

The agreements were entered into by Global Energy Ethiopia (GEE), a 99.9% owned subsidiary of Global NRG Pacific Ltd., which itself is a 50.1% owned subsidiary of Global Energy Inc. which was formed as a joint venture with Yanai Man Projects Ltd. for the purpose of producing crude castor oil to manufacture biodiesel fuels.

The land lease agreement is subject to strict conditions:

• The company must pay the SNRS a rental fee of 47 Birr (approximately US$5) or 78 Birr (approximately US$8.50) per hectare per year, depending on whether the leased land is defined as 'second' or 'first class' land, respectively.
• It must also completely develop the 20,000 hectares within eight years of the execution date of the agreement, including planting and maintaining trees or other oil producing crops.
• Furthermore, the company must completely develop the 15 hectares leased to it within three years of the execution date of the agreement.
• The company must perform a survey on the 20,000 hectares within 24 months of the execution date of the agreement.
• Global Energy Ethiopia has an option to lease additional farmland from the SNRS during the term of the lease agreement (up to an additional 100,000 hectares of farmland) on the same terms as the lease agreement for the 20,000 hectares.
• The company is not required to make any rental payments on its 20,000 hectare lease agreement until the fourth year of the agreement.

Castor oil is derived from seeds of Ricin communis, a crop grown widely in the subtropics and the tropics. The castor plant is a fast-growing, suckering perennial shrub, part of the Euphorbiaceae family (to which Jatropha also belongs), which can reach the size of a small tree (around 12 m) and requires limited amounts of water and fertilizer inputs. Castor oil plants yield some 1,200 to 2,000 liters of oil per hectare:
energy :: sustainability :: biomass :: bioenergy :: biofuels :: castor :: biodiesel :: bioplastics :: Ethiopia ::

Besides being a biodiesel feedstock, the oil derived from castor seeds has over 1000 patented industrial applications and is used in the following industries: automobile, aviation, cosmetics, electrical, electronics, manufacturing, pharmaceutical, plastics, and telecommunications. The following is a brief list of castor oil uses in the above industries: adhesives, brake fluids, caulks, dyes, electrical liquid dielectrics, humectants, hydraulic fluids, inks, lacquers, leather treatments, lubricating greases, machining oils, paints, pigments, refrigeration lubricants, rubbers, sealants, textiles, washing powders, and waxes.

Other countries, amongst them Jamaica, have decided to promote castor for the production of biodiesel, as the crop requires low amounts of water and fertilizer. It thrives in relatively poor soils and is accessible to poor farmers.

GEE intends in the coming months to enter into community farming agreements with local municipal authorities pursuant to which local farmers will grow castor seeds for the company and for cultivation of the leased lands with modern advanced agricultural systems. GEE also intends to file a request for funding from the Ethiopian Development Bank to fund 70% of the project investment and working capital for the first year.

This agreement represents entry into a rich area in a prime geographic location that holds the potential to garner global revenue while providing a sorely needed end-product. With strong government relations and an infrastructure in place, this joint venture represents one, of many, large projects on the continent of Africa. - Asi Shalgi, CEO of Global Energy Ethiopia.

Global Energy's mission is to commercialize innovative technologies which produce energy from waste and renewable sources, while contributing to a vision of a cleaner environment. The company intends to use of the most efficient and environmentally friendly of all currently available alternative fuel technologies.

Biopact:
Ad Hoc: Global Energy Subsidiary Enters Into 50 Year Lease Agreement With Ethiopian Regional Authority to Farm Castor Seeds for Production of Castor Oil on 20,015 Hectares of Land in Ethiopia - October 11, 2007.

Biopact: Jamaica selects castor beans as biodiesel feedstock - August 13, 2007

Biopact: The bioeconomy at work: robust bioplastic used for off-shore oil riser pipes - April 18, 2007

Biopact: The bioeconomy at work: bioplastic fuel lines to handle aggressive biodiesel - December 13, 2006

Ricin communis profile at the Handbook of Energy crops.