The seeds of change in Africa's economic climate

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In the remote interior of Congo, the news was buzzing around the villages: a Canadian company needed workers for a seed farm to produce jatropha plants, a new biofuel for global markets.

The company asked for 20 workers to arrive at 7:30 on a Wednesday morning. "You wouldn't believe it - there were 800 people who showed up, some of them a few days before, and they slept on the road," says Louis Tourillon, founder and CEO of Carbon2Green, a Montreal-based company.

"Those people need the work. They need what we're bringing there. And without climate change, we wouldn't be there doing that. The potential impact of what we're doing is just mind-boggling."

Africa has long been known as the biggest victim of climate change: the region of the world most vulnerable to the droughts and floods that are expected to increase in the coming decades. It's a serious threat: water scarcity alone could affect 250 million Africans by 2025. But some entrepreneurs and financiers believe that Africa can also benefit from the economic opportunities of climate change. They hold a radically different vision of the climate trends, seeing the chance for jobs and development, instead of just doom and gloom.

As the world adapts to climate change, it will need carbon sinks - such as the vast rain forests of Congo - to absorb the rising emissions from fossil fuels. And it will need cleaner sources of energy: renewable alternatives such as wind power, geothermal, biofuels, hydroelectricity and solar power. All of these resources can be found in abundance in Africa.

Mr. Tourillon's company, for example, would employ 180 full-time workers at its Congo operations, where it plans to grow 35 million jatropha plants on 14,000 hectares of land. Another 3,000 farmers would get indirect jobs by harvesting the jatropha and selling it to the company.

The project could be a boon for an impoverished region of Africa where unemployment is about 60 per cent and average wages are about 35 cents a day. The company says it will spend $2-million annually to buy jatropha seeds from the 3,000 farmers, while the full-time employees would get $500 to $2,000 a month.

The seeds of the jatropha plant can be converted into oil that can fuel generators and produce electricity. "This is not new, but we'd be the first to do it in Congo on this scale," Mr. Tourillon said in an interview. "We've put together a business model where everyone makes money."

Traditional fossil fuels, primarily diesel for power generators, are currently providing 80 per cent of Africa's energy, he said. "There's a business opportunity to replace that 80 per cent. The market could be huge. The market is already there - they are buying fuel - so you don't need to create a new market."

Biofuels are a controversial industry in Africa. The potential is certainly enormous. Europe and the United States have passed laws to encourage the use of ethanol to replace fossil fuels, and entrepreneurs are taking advantage by creating sugar-cane plantations in countries such as Sierra Leone to produce ethanol for export to Europe. But critics worry that the plantations will encourage "land grabs" that could push thousands of ordinary Africans off the land.

Jatropha is equally controversial. It was once hailed as a "miracle plant" that would grow on marginal land, providing a higher income for impoverished farmers. Foreign investors, including huge corporations, jumped into the industry. But some environmentalists are now criticizing the jatropha boom, saying it has actually increased poverty in some regions where the jatropha crops were not commercially viable, consumed too much water and required better soil than originally thought.

Mr. Tourillon is undeterred. "It's a good thing that the hype has come down," he says, describing the new scrutiny as a valuable test for the emerging industry.

His own jatropha plantation has been inspected by United Nations environmental officials, who must certify that he is growing the plants on degraded land that cannot be used for food crops. If he wins approval, he qualifies for credits under the Clean Development Mechanism, set up under the Kyoto Protocol, which he can sell to polluting companies in wealthier countries to reduce their emission-cutting obligations. Only a tiny fraction of CDM credits are currently produced in Africa, but this could rapidly increase as entrepreneurs such as Mr. Tourillon realize the possibilities in the continent.

His company would sell its jatropha oil as biodiesel to Congolese consumers and to the nearby city of Kikwit to produce electricity, beginning by late next year. After a $9-million investment, his company hopes to reap $25-million in CDM credits over the next 10 years. It plans to produce 24 million litres of biodiesel fuel annually, earning $15-million in annual revenue and $4-million in profits.

Until now, Asia has been the most popular region for CDM projects, with Africa accounting for only 2 per cent of the 2,060 worldwide projects. But this is beginning to change. There are more than 120 CDM projects in Africa today, almost triple the number of three years ago. When the UN organized an Africa Carbon Forum in Nairobi this year, more than 1,000 participants showed up - double the expected number.

One of the biggest CDM projects in Africa is a $600-million wind-power project at Lake Turkana in Kenya, which is expected to produce 300 megawatts of wind-generated electricity. It could provide up to 20 per cent of Kenya's national electricity supply, replacing 16 million tons of carbon dioxide emissions. It would produce energy at half the cost of diesel-generated electricity - an encouraging prospect for the three-quarters of Africans who have no access to electricity.

"We expect to see a massive scaling-up of renewable energy projects in Africa," says Bobby Pittman, a vice-president at the African Development Bank, which is helping finance the Kenya wind-power project. "You can see the ingredients for something big."

The bank is already developing 26 renewable energy projects across the continent, costing a total of about $11-billion. It aims to be Africa's leading financier of clean energy, Mr. Pittman said.

Solar power, too, is expanding rapidly in Africa. The most ambitious project is the massive $550-billion Desertec project, headed mostly by German companies, which would collect energy from solar farms in the Sahara Desert to provide 15 per cent of Europe's electrical needs by the middle of this century. The project is touted as a huge contribution to the fight against climate change.

Hydro power has the same enormous potential in Africa, with only 7 per cent of its potential having been exploited so far. The Congo River alone could produce more electricity than the combined capacity of every nuclear-power station in France. A proposed $80-billion hydro project on the Congo River is still in the planning stages. In total, renewable energy sources such as hydro, wind and solar could provide 80 per cent of Africa's electricity needs, some experts say.

The Congo Basin is also the location of one of the world's greatest rain forests, a vast shield against global warming, offsetting almost 2 per cent of the world's greenhouse-gas emissions. Former Canadian prime minister Paul Martin, co-chairman of a fund to preserve the Congo forest, says the hydro project on the Congo River is just one of the potential revenue sources that could help to save the forest from illegal logging.

"Africa is a major asset and major player in the fight against climate change," Mr. Martin said in an interview. "But any program for the Congo Basin will have to demonstrate that the forest is worth more alive than dead. If we're asking the people to keep those forests alive, as opposed to cutting them down, there has to be revenue in it for them."