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UDB in a syndicated funding of a USD 35 Million investment to giant Ethanol Plant by Madhhvani Group.

posted 24 Nov 2016, 04:08 by David Tamale   [ updated 24 Nov 2016, 05:59 ]

In what is set to be the largest Ethanol plant in the region producing 19.8 million litres of Ethanol, consortium of Banks have raised funding to the tune of USD 25 Million towards the financing of Kakira Sugar Limited's forward integration expansion strategy of diversifying their product range to include Ethanol.

The Banks that have participated in this financing are UDB and the two leading commercial Banks in Uganda i.e. Stanbic and Standard chartered. UDB Senior Business Development Officer Alex Area tells us more in this narrative.

Kakira is the flagship company of the Madhvani group of companies which is one of the largest private sector conglomerates in East Africa with a balance sheet in excess of USD 500 Million. Kakira is the largest employer in Uganda providing a source of livelihood to 100,000 households involved in providing labour and sugar cane input. It produces up to 180 MT of sugar annually, generates 52MW of power of which 21MW is supplied to the main grid.

The project is 70% complete and will be delivered by the end of October 2016. Upon commercial operation it will produce from its molasses (the byproduct of cane sugar) - either; Fuel Grade Anhydrous Ethanol- for blending with Petrol Extra Neutral Alcohol ('ENA')- for medical use and portable alcohol.

This landmark deal underscores UDB's mandate of financing projects with a massive socioeconomic impact. Production of Fuel Grade Anhydrous Ethanol for blending with petroleum products will save the country in excess of USD 100 Million as well as prolong the finite period of our oil reserves. The ENA to be produced will reduce on the country's import bill for the same product whose demand is in excess of 36 million litres annually and 67% of this is imported.

Ethanol is environmentally sustainable with bio- composting solutions that ensure soil fertility as well as waste water treatment solutions.