Swiss group Addax signs Sierra Leone bioenergy deal

Energy group Addax & Oryx said on Friday that it had signed a 258 million euro ($368 million) deal to finance the building of an ethanol refinery in Sierra Leone, a project that has been criticised by non-governmental groups. Addax, through its subsidiary Addax Bioenergy, has signed the contract with seven European and African development banks to finance the renewable energy project close to Makeni, said the Geneva-based group in a statement. Planned under the project is the "development of a sugarcane plantation, the construction of an ethanol refinery and a biomass power station" which would provide energy to the refinery and provide a fifth of the country's electricity, added the statement. Construction is expected to begin this year, and operations are set to start in 2013. About 700 people are to be employed, and should eventually create 2,000 jobs in the region, it said. The project has been criticised by NGOs, which said it could lead to food insecurity for the country. The Sierra Leone Network on the Right to Food found that "many farmers in project affected communities have already lost their access to fertile lands." And although "Addax has provided community members with alternative farm lands and confined them to smaller lands, promises by Addax to plough and harrow the lands materialized too late in 2010. "This led to very low yield on these fields and local communities reported to now face growing food insecurity and hunger," it added. Beat Dietschy, who heads Swiss group Bread for All expressed shock that "the landowners have given consent to Addax based on verbal promises which have not been realized." He noted that landowners did not get any written contracts and have limited knowledge of the content of these contracts. "We are alarmed by this situation that has a large potential for conflict," he added. Reacting to the criticisms, Addax said that it had developed its project "on the basis of dialogue." "Detailed discussed were held over more than two years" with the landowners, local and national authorities, as well as civil society, said Nikolai Germann, who heads Addax Energy, in a statement.