March 10, 2010 -- Shapoorji Pallonji and Co. Ltd, an Indian company, signed an agreement with the Ethiopian government to lease up to 50,000 hectares of land to cultivate pongamia pinnata, a feedstock for biodiesel feedstock, reports Livemint.com. This is the first major step for the company to expand its fledgling renewable energy business, it was reported.

“Initially they will take around 10,000ha and gradually scale up cultivation,” said Mehreteab Mulugeta, minister councillor for economic affairs at the Ethiopian consulate in New Delhi.

Ashok K. Gupta, who heads the Shapoorji Pallonji Group’s energy division, confirmed the signing of the lease agreement but refused to give any other detail.

Officials of the group have been visiting Ethiopia for almost a year. The group has decided to cultivate pongamia pinnata and edible oil seeds there, Mulugeta said.

The group is the second Indian company after Emami Biotech Pvt. Ltd, an arm of personal care products maker Emami Ltd, to lease a large tract of land in Ethiopia for cultivation of biodiesel feedstock.

In August last year, Emami Biotech signed a similar agreement with Ethiopia to lease up to 40,000ha for cultivation of jatropha, another biodiesel feedstock, and edible oil seeds.

The company is looking to produce up to 100,000 tonnes of crude oil in Ethiopia, which would be shipped to its plant in Haldia in West Bengal for processing.

A large number of international companies have taken land on lease in Ethiopia for cultivation of biodiesel feedstock, according to the Ethiopian government.

Ethiopia has emerged as one of the preferred destinations for biodiesel manufacturers because of “availability of large tracts of contiguous land and the right climatic conditions. Government procedures are simple and the people there are helpful and hardworking,” Agarwal said.

Source: Livemint.com