KSL started the preparation of the Business Plan for the ethanol project which involves setting up a distillery at Kakira that can produce about 60,000 litres of ethanol per day – say 18 million litres of ethanol annually from 74,000 Tons of molasses, which will be available after completion of the KSL further Expansion Project. This would be blended with petrol by the oil companies prior to selling the same to the motorists. Uganda currently consumes approximately 250 million litres of petrol. Therefore KSL’s ethanol production can blend up to 7.2% of the petrol consumed in the country.
In November 2008, KSL appointed a Technical Consultant (Avant-Garde Engineers & Consultants Ltd. from India) to carry out a detailed techno-economical feasibility analysis. The Consultant studied the existing plant and infrastructure at Kakira and prepared a basic engineering concept for the KSL anhydrous ethanol project.
According to the Consultant’s Draft Report of June 2009, the Kakira Anhydrous Ethanol Production Project is estimated to cost US$ 35 million.
Whilst MEMD’s Renewable Energy Policy envisages mandatory blending, the practical procedures for blending and distribution of the ethanol-blended petrol by the oil companies have not yet been formalised.
Government of Uganda through MEMD is now in advanced stages of formulating enabling legislations for the blending while UNBS is developing standards for the ethanol and ethanol blended fuel in Uganda. The enactment of the enabling legislations including Regulatory Framework, Tax Incentives, Standards, Handling / Storage, Pricing, Blending Facilities for ethanol and blended fuel products and Environmental Aspects of ethanol projects is in place.
KSL will start the project implementation in earnest as soon as the appropriate enabling legislations and national standards for the blended fuel are in place.