Written by Fred Ojambo | From Bloomberg

Kakira Sugar Works Ltd., Uganda’s biggest processor of the sweetener, plans to build an ethanol plant by the end of 2016 after it spent $75 million expanding cane-crushing and power operations over the past two years.

The ethanol from the facility that will have capacity to produce 20 million liters (5.3 million gallons) annually will be distilled from 85,000 metric tons of molasses, the result of processing 2 million tons of cane, Kenneth Musinga Barungi, an assistant to the company’s general manager, said by e-mail yesterday.

“Directors are discussing the design, possible equipment suppliers and costs, with plans for production to start by mid-December 2015,” he said. Officials visited India and China for advice on feasibility studies, Barungi said.

Kakira and other producers currently sell molasses cheaply to distillers of a local gin. The landlocked nation may produce a surplus of sugar this year, with output rising 32 percent to 442,550 tons from a year earlier, according to its manufacturers’ association. Domestic demand is about 320,000 tons annually. Uganda consumed 17,000 barrels of petroleum products daily in 2012, according to the U.S. Energy Information Administration.

The ethanol will be blended with gasoline to cut fuel costs and the mixture will range from 8 percent to 15 percent, Barungi said. Kakira and other processors of the sweetener are lobbying the East African nation’s government to pass policy before production starts, he said.

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