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Sanlam buys in on Sappi, Alien Fuel Group biomass-to-energy project

7th December 2023

By: Marleny Arnoldi

Deputy Editor Online


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Asset manager Sanlam Investments will invest R46-million in a joint venture (JV) biomass-to-energy project between energy company Alien Fuel Group and pulp, paper and packaging manufacturer Sappi in Umkomaas, KwaZulu-Natal.

The Sanlam Investments Sustainable Infrastructure Fund (SIF) is funding a portion of the JV, which is known as Mkomazi Alienfuel.

The project will provide crucial baseload renewable energy derived from biomass to Sappi's dissolving pulp manufacturing plant in Umkomaas.

Dissolving pulp is derived from cellulose from woodfibre and is used in the manufacture of textiles, household, industrial and pharmaceutical applications including acetates, washing sponges and non-woven fabrics.

The project focuses on converting biomass waste, such as sawdust, knots and bark left behind in the dissolving pulp manufacturing process, into high-calorific-value wood pellets.

These wood pellets replace fossil fuels such as paraffin, diesel and coal in industrial boilers and burners for the generation of electricity, steam and heat.

The companies aim to establish an R80-million waste-to-energy plant, creating a sustainable source of electricity and steam from wood pellets.

Sappi will provide the raw material and has committed to purchasing the wood pellets as part of an initial five-year contract.

Sanlam’s SIF was launched in September 2021 with an initial commitment of R500-million. The company plans to raise a further R5-billion to invest in local projects that foster economic growth, market development, and job creation while delivering inflation-beating returns.

The fund deploys capital across various sectors including renewable energy, conventional energy, transportation, communication, water, and waste-related infrastructure, all while strictly adhering to environment, social and governance criteria.

SIF portfolio manager Pawan Singh says the funding of Alien Fuel Group’s growth projects is in line with the fund’s objectives. “The JV with Sappi will create new job opportunities for the community, boost the local economy and promote sustainable business practices.”

A notable positive impact of this project is its contribution to climate change mitigation through the utilisation of feedstock derived from wood shavings and other wood waste typically left over from Saiccor Mill’s manufacturing processes.

Typically sent to landfills, this wood waste generates methane – a greenhouse gas with about 28 times the global warming potential of carbon dioxide – during decomposition.

This JV will not only mitigate about 57 000 t/y of landfill waste but also avert 322 000 t of carbon dioxide emissions over a ten-year period.

It is estimated that the project will create 63 full-time jobs within the local community, with one-third of these jobs earmarked to be held by women.

Twenty-five of the employees have already been onboarded.

During the project’s construction phase, 72 temporary jobs were created, of which 53 were filled by local community members.

These outcomes align directly with Sanlam Investments’ commitment to the United Nations Sustainable Development Goals, those related to gender equality, decent work and economic growth, and reduced inequalities.

For Sappi, the Mkomazi Alienfuel JV will result in significant cost savings in the form of reduced landfill costs and aligns with its own commitment to promote renewable energy and decarbonisation.

Alien Fuel Group director and founder Bruce Johnson says the company could not have asked for better partners in rolling out its ground-breaking South African-designed technology.

“The Sappi Saiccor site has been a great opportunity to prove the efficiency and reliability of our biomass burners along with the impressive performance of our Alien Fuel. It has been inspiring to see the rapid rate of expansion and massive interest in our scalable environmental and socio driven business model,” he adds.


Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online


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