Construction on Africa's first bioethanol plant began on Tuesday, at a foundation-laying ceremony attended by Free State Premier Beatrice Maarshof.

The R700-million Bothaville, Free State plant, scheduled for first production by the end of next year, would create up to 60 permanent jobs at the plant, as well some 10 000 indirect jobs, Ethanol-Africa CEO Johan Hoffman told Engineering News Online in an exclusive interview.

He stated that the plant was the first of eight other similar plants that would be rolled out across South Africa over the next six years, and that Ethanol Africa was also exploring opportunities in Zambia, Mozambique and Angola.

Bloomberg reported that the company planned to invest R7-billion in the eight local plants.

“The plant has the capacity to produce half-a-million litres of bioethanol a day, using 1 200 tons of maize,” Hoffman detailed, pointing out that it would also produce valuable coproducts, including biodiesel and protein-rich animal food, distillers dried grains with solubles.

Hoffman explained that the plant situated in Bothaville, South Africa's biggest maize-producing area, would be fed by yellow-maize or sorgum, and Ethanol Africa was committed to buying feedstock from local grain producers.

He added that there was a possibility for some of the other plants to use sugar cane, instead of grain, to produce bio-ethanol used in the manufacturing of fuel.

Maarshof added that the Free State government continued to focus attention on the growth and development of the agricultural sector, and that she believed Ethanol Africa's Bothaville plant would be one of the most important development initiatives in the province's agricultural sector.

Hoffman stressed that the plant would be profitable at oil prices lower than $50 a barrel.

He also said that bioethanol could be locally produced at a profit even if maize was bought at import parity at current international bioethanol prices.

The project was funded by various local and international investors, Hoffman said.

Bloomberg reported on Tuesday that Ethanol Africa would raise R1,2-billion by the end of the year to help finance the construction of two bioethanol facilities, R500-million of which South Africa's third-biggest bank, Absa Group, would help raise in a private share sale.

US president George Bush had stressed that the US would focus on alternative fuel supplies, such as bioethanol, encouraging US firms to invest in such technologies.

Companies in Brazil and Europe had also invested in the technology.