Name and Location
Markala sugar project (MSP), Mali.

Client
The project is a public–private partnership between the government of Mali and private investors. The Mali government is represented by the Ministry of Industry, Investment and Trade.

The execution of the project will be the responsibility of two companies formed by the partners.

The agricultural component will be overseen by the Sugarcane Development Corporation (CaneCo), with the industrial side managed by the Markala Sugar Company (SoSuMar). However, Illovo Sugar has now pulled out of the Markala sugar project, largely due to political risk and also funding difficulties, and will focus on growth opportunities elsewhere in Africa.

Illovo reportedly ended its interest in the project after the government failed to finalise funding and complete undertakings with regard to infrastructure development. It added that security risk was also a concern after a coup in the country in March this year.

SoSuMar is owned by Illovo Sugar (65%), Schaffer & Associates International (2.5%), Mali private investors (30%) and the government of Mali (2.5%). However, in May 2012 Illovo Sugar announced that it had pulled out of the Markala sugar project, largely owing to political risk and also funding difficulties, and that it would focus on growth opportunities elsewhere in Africa.

Illovo reportedly ended its interest in the project after the government failed to finalise funding and complete undertakings with regard to infrastructure development, adding that security risk was also a concern after a coup in the country in March this year.

Project Description
The MSP comprises two components.

The agricultural component involves the establishment of a 14 132 ha irrigated sugar cane estate on the Niger river, in Markala, some 275 km north-east of the capital, Bamako. The estate is expected to produce 1.48-million tons of sugar a year.

The industrial component entails the construction of a sugar mill, an ethanol plant and a power cogeneration facility. The mill will have a cane crushing capacity of 7 680 t/d at full capacity, producing 190 000 t/y of sugar.

The sugar will be traded locally, as well as on the regional market, particularly in Burkina Faso, Niger and Senegal.

The ethanol plant is planned to produce 15-million litres of ethanol a year, while the cogeneration unit will generate 30 MW/y of electricity.

Value
The total value of the MSP is estimated at R2.6-billion, of which R1.4-billion will be used on the manufacturing side and R1.2-billion on the development of the irrigated sugar cane estate.

The project is primarily funded by the government of Mali, but wholly managed by South Africa’s Illovo Sugar through a 25-year technical services agreement.

The Illovo board has approved an equity investment of R394-million in the project.

Duration
The project will be developed over a five-year period.

Construction of the factory started in 2009 and will start crushing at full capacity in 2012.

Latest Developments
Illovo Sugar pulled out of the Markala project in May 2012.

Key Contracts and Suppliers
Illovo Sugar and Schaffer & Associates (project management and execution); African Development Bank (AfDB), Illovo Sugar, the government of Mali and other donors, including the Islamic Development Bank, the Economic Community of West African States Bank for Investment and Development, the West African Development Bank, the Saudi Fund for Development, the Kuwait Fund, the Organisation of Petroleum Exporting Countries Fund and the Export-Import Bank of Korea (finance).

On Budget and on Time?
Not stated.

Contact Details for Project Information
AfDB, Onike Nicol-Houra, tel +216 97 968 706 or email o.nicol@afdb.org.
Illovo Sugar marketing director Hans Hackmann, tel +27 31 508 4300, fax +27 31 508 4493 or email hhackmann@illovo.co.za.
Schaffer & Associates, tel +223 228 5170, fax +223 228 1998 or cell +223 674 1049.