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The Regional Cassava Processing and Marketing Initiative (RCPMI) 

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The use of cassava wastes to produce energy: outcomes of a feasibility study  

implemented in Ghana. 

   

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In collaboration with the IFAD‐funded

“Root & Tuber Improvement and Marketing Programme/RTIMP” of Ghana

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October 2010 

            

Prepared by:   

Mr. Andrea Serpagli  IFAD‐RCPMI/Coordinator   a.serpagli@ifad.org 

Mr. Govind Prasad Nagori  IFAD/Consultant, Biogas Specialist  gpnagori@ankurscientific.com 

Mr. Giuseppe Amoriggi  IFAD/Consultant Food Technologist  giuseppe.amoriggi@libero.it 

Mrs. Chiara Calvosa  IFAD/Consultant, Economist  c.calvosa@ifad.org 

 

Table of Contents

Executive Summary .......................................................................................................... 1 Part A: Objective of the study and methodology used .................................................. 3 1. Objective ......................................................................................................................... 3 2. Methodology used........................................................................................................... 3 Part B: Technical aspects about the production of bio-energy from cassava wastes

and other biomasses............................................................................................ 5 3. Suitability of wastes from cassava and wood to produce bio-energy: outcomes of

laboratory analysis .......................................................................................................... 5 3.1. Outcomes of laboratory analyses ......................................................................... 5 3.2. Cassava peels and barks....................................................................................... 5 3.3. Wood Shavings and Saw Dust............................................................................. 5 3.4. Wastewaters resulting from cassava processing .................................................. 6

4. Technological aspects related to the generation of bio-energy from cassava and other suitable wastes ................................................................................................................ 7

4.1. Technological aspects: generalities...................................................................... 7 4.1.1. Gasification technology .............................................................................. 7 4.1.2. Bio-methanation technology (biogas)....................................................... 10

5. Environmental aspects related to the generation of bio-energy from cassava and other suitable wastes .............................................................................................................. 11

5.1. Current state of affairs in Africa (including Ghana) .......................................... 11 5.2. Environmental aspects linked to the use of the gasification technology ........... 12

Part C: Potential of producing bio-energy from cassava wastes and other biomasses in Ghana............................................................................................................. 13

6. Availability and requirements of cassava wastes.......................................................... 13 6.1. Cassava roots production in Africa and Ghana: some basic statistics ............... 13 6.2. Ghana: availability of cassava wastes and other target biomasses to produce bio-energy........................................................................................................................ 14 6.3. Ghana: Cassava waste requirements to implement the two target pilots........... 15 6.3.1. Gasification ............................................................................................... 15 6.3.2. Bio-gas ...................................................................................................... 17

Part D. IFAD interventions in the cassava sector in Ghana ....................................... 18 7. IFAD current and proposed interventions..................................................................... 18

7.1. Current interventions ......................................................................................... 18 7.2. IFAD proposals for setting up energy producing units from cassava processing wastes (biomasses and wastewaters) ........................................................................ 19 7.2.1. Introduction............................................................................................... 19 7.2.2. The General Case...................................................................................... 20 7.2.3. The proposed pilot plant in the Asueyi community (application) ............ 20

PART E. Profitability of producing bio-energy in Ghana .......................................... 23 E.1. General case: Outcomes of a Technical and Financial Analyses .............................. 23

E. 1.1. Technical Analyses ................................................................................... 23 8. Heat requirements and utilization ................................................................................. 23

E. 1.2. Financial Analyses .................................................................................... 25 9. Profitability of the proposed investments ..................................................................... 25

9.1. Generalities ........................................................................................................ 25 9.2. Total energy expected to be produced ............................................................... 25 9.3. Key information and main assumptions for implementing financial analyses for both the gasifier and the bio-gas plant ...................................................................... 26 9.4. Outcomes of the financial analysis .................................................................... 27 9.4.1. Gasifier...................................................................................................... 27 9.4.2. Biogas plant .............................................................................................. 28

E.2. Pilot Plant (Application): Outcomes of a Technical and Financial Analyses ........... 29 E. 2.1. Technical Analyses........................................................................................ 29

10. Electricity and heat total requirements and expected uses.......................................... 29 E. 2.2. Financial Analyses......................................................................................... 32

11. Overall outcomes of the proposed investments .......................................................... 32 11.1. Generalities ...................................................................................................... 32 11.2. Key information and main assumptions for implementing financial analyses for the gasifier ........................................................................................................... 32 11.3. Outcomes of the financial analysis in the case of the gasifier ......................... 33

Annexes Annex 1 - Results of the laboratory analyses on cassava peels and barks.......................... 1 Annex 2 - Results of the laboratory analyses on wood shavings and sawdust ................... 2 Annex 3 - Financial analysis: Gasifier – General level ...................................................... 3 Annex 4 - Financial analysis Biogas Plant ......................................................................... 8 Annex 5 - Financial analysis: Gasifier– Case study in the Asueyi community................ 10

List of Acronyms and Abbreviations

CAADP: Comprehensive Africa Agriculture Development Programme (Ghana)

CPCB: Central Pollution Control Board

FAO: Food and Agriculture Organization

GHS: Ghanaian Cedi

GPC: Good Practices Centre

IFAD: International Fund for Agricultural Development

IRR: Internal Rate of Return

NHS: National Health Service

NEPAD: New Partnership for Africa’s Development

RCPMI: Regional Cassava Processing and Marketing Initiative

R&T: Roots and Tubers

RTIMP: Roots and Tubers Improvement Marketing Programme

USD: United States Dollar

VAT: Value Added Tax

WCA: Western and Central Africa

Exchange rate: 1 USD=1,4 GHC (August, 2010)

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Executive Summary The study has assessed the technical and financial feasibility to put in place in Ghana a gasifier and a biogas plant which use cassava wastes (peels, barks and wastewaters), along with maize wastes (stalks and leaves) and Shea nuts husks as feedstock to generate bio-energy (electricity and hot/cold air). The study results from observations made during field visits implemented by a team of RCPMI and RTIMP specialists in the Ashanti and Brong-Ahafo regions of Ghana in August and September 2010 and build s up on a similar study that the RCPMI carried out in Nigeria during the first quarter of 2010. Although the technical and financial analyses included in this study refer to Ghana, similar results can be expected when the same investments are implemented in other countries of the WCA region, as the previous study in Nigeria clearly showed. Adaptation of financial parameters would however be required. The technical feasibility has been based on laboratory analyses carried out in India and Nigeria to assess both ignition and flow performances of the biomasses (cassava peels, blends of sawdust/wood shavings, wastewaters) to be used as feedstock. Based also on the outcomes of these analyses, investments in equipments and materials for the production of bio-energy (electricity and bio-gas) through a gasifier and a biogas plant have been worked out, including for a practical application (pilot plant) in the Asueyi community –Techiman Municipality, which is one of the major cassava producing areas of Ghana. Total investment costs for a “turn-key” investment were estimated at USD 340,000 in the case of the gasifier and USD 31,000 for the bio-gas plant. Working capital to pay off short-term liabilities during Y1were estimated at USD 10,000/year for the gasifier and USD 800/year for the bio-gas plant. All the money required to meet both fixed and variable costs (including financial ones) has been supposed to be borrowed from local banks at a 22% interest rate; as it could be expected, this fact is significantly increasing the overall cost of for the proposed investments. In the light of the relatively low investment cost for the bio-gas plant, it would be quite easy to replicate the proposed investment at a local (village) level. However, this would not be recommended for the gasifier for which, given the high investment cost, a central plant serving several villages at the same time would be more recommendable. Both plants are assumed to work a total of 22 hours/day during 330 working days/year; however, sensitivity analysis shows positive results also when the gasifier plant works just 18 hours/day (during 330 days/year).

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Revenues for both plants have been derived by: (i) first converting their expected outputs (either electricity or heat) into liters of diesel or kilograms of firewood –which, in rural areas of Ghana, are the feedstock most widely used to currently produce energy (electricity) and heat, and (ii) then multiplying the resulting values (lts or kgs) for the respective market prices prevailing in the region targeted with this study. Annual cash-flows (both current and discounted at 22% discount rate) for the gasifier remain positive throughout the entire investment’s life (10 years); net profits (after payment of corporate taxes) are positive starting from Y1 (USD 6,000) till Y10 (114,000). Much less favorable outcomes are obtained from the financial analysis for the bio-gas plant, for which annual cash-flows (current and discounted) and net profits become positive as from Y8. The resulting IRR for the gasifier ranges between 21% and 17% (depending on which of the two investment opportunities covered with the study is considered) and is significantly higher than the average interest rate (10%) paid on bank accounts/deposits in Ghana. IRR continues to remain very appealing even when, with the sensitivity analyses, major changes are made in the assumptions. Pay-back period is 5 or 6 years, depending on the option considered. IRR and pay-back period for the bio-gas plant do not show to be very appealing, mostly because the high incidence of financial costs over overall cost structure. Given the high positive effects on both the environment and workers’ health that the use of cassava solid and liquid wastes have when they are used to produce energy the implementation of a detailed environmental impact analysis –not undertaken with this study, though recommended- would show even higher overall impact than the one this study could estimate. Current practices for disposing off these cassava by-products in WCA are, in fact, extremely risky for soils’ fertility, purity of table waters and for the health of industry operators and the general population, especially in rural areas where cassava is processed.

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Part A: Objective of the study and methodology used

1. Objective

Objective of this technical and financial study is to assess the feasibility of setting up a pilot plant to produce bio-energy from cassava processing wastes and other suitable biomasses -such as: sawdust and wood shavings, maize stalks and leaves, Shea nuts husks etc. All information presented in this study is real and based on data and figures collected in Ghana in the course of August and September 2010. The feasibility includes also a concrete application for a pilot plant proposed to be set up in the Brong-Ahafo region -more precisely, in the municipality of Techiman. However, it is worth highlighting that what presented in the following pages could be easily adapted to other geographic contexts, both within the West and Central Africa region and elsewhere in Africa. This study assesses the technical/financial feasibility for the two following plants: • A gasification plant to produce bio-energy from a blend of wastes from cassava (peels,

barks and small roots), sawmill (sawdust, shavings and small pieces of wood) and other suitable bio-masses (resulting from maize and nuts processing);

• A methanization plant (biogas) to produce bio-energy from wastewaters resulting from cassava processing and by means of an anaerobic bio-digestion.

For each of the two plants above, a separate technical/financial feasibility has been implemented for the two following options: • Option 1): General case: Production of bio-energy to be sold on the local market to

any potential interested buyer; • Option 2): Pilot plant (application): Production of bio-energy to be utilized in the

context of a specific pilot plant proposed for implementation (jointly with RTIMP) in the Brong-Ahafo region -more precisely, in the community of Asueyi.

2. Methodology used

This feasibility study further develops the outcomes of the following research work that the RCPMI carried out, and published, in March 2010: “Squaring the circle: how food and fuel can be produced in a complementary and not competitive manner - The use of cassava wastes to produce energy: outcomes of a feasibility study implemented in Nigeria 1 ”. As in the case of the Nigerian study 2 , also the technical and financial feasibility proposed for Ghana foresees the setting up of pilot plants which make use of 1 The study is available on internet at: www.fidafrique.net. 2 The pool of RCPMI consultants involved in the preparation of the study in Nigeria included: Dr. Govind Prasad Nagori, Ankur biogas specialist; Mr. Giuseppe Amoriggi, RCPMI/Technologist; Mrs. Chiara Calvosa, IFAD/Economist and local specialists from the IFAD-supported: “Roots and Tubers Expansion Project (RTEP)” in Nigeria.

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cassava wastes and other biomasses available locally as feedstock for bio-energy production (both as electricity and cold/hot air). The methodology adopted to carry out this study includes the implementation of: (i) field visits in Ghana for collecting primary and secondary data3, (ii) laboratory analyses4, (iii) face-to-face meetings with local cassava producers and processors, (iv) visits to a sample of small-medium wood processing factories and (v) working sessions with the IFAD specialists5 attached to the IFAD-funded: “Roots and Tubers Improvement Marketing Programme (RTIMP)” of Ghana. The activities carried out in Ghana during the field visits can be summarized as it follows:

Visits to cassava producers and processing centers of different size and making use of different technologies;

Visits to local small and medium-size wood processing factories; Visits to a local nut processing factory (“Ghana Nuts Ltd”); Visits to several cassava Good Practice Centers (GPCs) which are currently being set up

by RTIMP and benefiting from its assistance countrywide; Working sessions with RTIMP staff and local experts, including from the GRATIS

Foundation and the Food Research Institute. During the visits mentioned above, data on solid and liquid wastes and on the power required by each processing unit visited, along with present practices to reuse/dispose off wastes, were documented with reference to: (i) cassava peels (particularly when obtained trough manual peeling); (ii) waters resulting from cassava washing and processing; (iii) wood shavings; (iv) sawdust; (vi) maize stalks and leaves; and (v) Shea-nuts husks. The field visits allowed RCPMI specialists to ascertain the availability of wastes, besides those from cassava processing and which could be used for gasification and bio-methanation purposes.

3 From national and international research centers such as the: Food Research Institute/Ghana, International Institute for Tropical Agriculture/Nigeria, Bank of Ghana, GRATIS Foundation/Ghana. 4 Laboratory analysis on the cassava samples were carried out by the Ankur Scientific Energy Technologies Pvt. Ltd., Vadodara, India. 5 Mr. Vincent Cyril Akoto, Processing & Post Harvest Specialist, RTIMP/Kumasi.

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Part B: Technical aspects about the production of bio-energy from cassava wastes and other biomasses

3. Suitability of wastes from cassava and wood to produce bio-energy: outcomes of laboratory analysis

3.1. Outcomes of laboratory analyses The lack of data on the suitability of cassava wastes (peels, barks, wastewaters) and wood wastes to generate bio-energy made necessary to work them out through targeted proximate laboratory analysis. Laboratory analyses were then carried out at Polytechnics Laboratory, Ibadan, Nigeria and Ankur Laboratory, Vadovara, India. Extensive details on outcomes of these analyses are provided in Annex I for cassava peels and barks and in Annex II for wood shavings and sawdust mixture. However, a short summary of the main results is given in the following paragraphs to easy the reading of this report.

3.2. Cassava peels and barks Cassava peels/barks have low ash content (<5%) and an ash fusion temperature above 1200°C. Their bulk density remains above 250 even after drying; this makes them to flow easily and burn well. The peels have a high moisture content (~66%), which makes their drying a necessity to bring the moisture content down to 20% and make them suitable for gasification (generation of producer gas). Fig. 1: Dried peels/barks Fig. 2: Raw peels/barks

3.3. Wood Shavings and Saw Dust In order to be used for gasification purposes, wood shavings and saw dust needs to be blended in a 7:3 proportion and have an overall moisture content lower than 20%. When burned, the blend of wood shavings and saw dust (mixed in a 7:3 proportion) shows a low ash content (<5%) and an ash fusion temperature above 1200°C. Its bulk density is low (which makes the blend not very suitable for gasification) and it does not flow easily; however, it burns well. However, after being mixed with dried cassava peels (in a 1:1 proportion), ability to flow smoothly inside the gasifier increases significantly.

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Fig 3: Dried wood shaving/sawdust blend

3.4. Wastewaters resulting from cassava processing The analysis of cassava washing/processing wastewaters conducted at the Polytechnics Laboratory in Ibadan (Nigeria) resulted in the following: • Total solids : 4,500 mg/L • Total suspended solids : 1,450 mg/L • Total volatile solids : 2,000 mg/L • pH : 5.14 The results above indicate that the wastewater is acidic in nature and has good amount of volatiles, i.e. biodegradable matters. This is also evident from the review of the existing literature on this issue, which for this kind of wastewaters provides the following data: • BOD : 3,400 – 6,018 mg/L • COD : 3,870 – 6,680 mg/L • Free Sugars : 640 – 2,075 mg/L • Total Solids : 4,000 – 6,600 mg/L • Nitrogen : 65 – 74 mg/L Based on the value of the organic load reported above, one liter of cassava wastewater has a potential to generate from 2 to 3.5 liters of biogas.

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4. Technological aspects related to the generation of bio-energy from cassava and other suitable wastes

4.1. Technological aspects: generalities While energy can be derived from bio-masses using the gasification technology –through which “producer gas” is generated, in the case of wastewaters biogas is obtained using a bio-methanation technology. While the gasification plants are easily available on the international market with an installed capacity ranging from 5 KW/h up to 2200 KW/h, this is not the case for bio-methanation technology. Plants to utilize this technology have, in fact, to be designed on a case to case basis, according to specific customers’ needs.

4.1.1. Gasification technology Gasification consists in the conversion of solid renewable biomasses into a mixture of combustible gases, called “producer gas” (CO + H2 + CH4)6, from which energy is generated. Gasification can refer to the use of various biomasses and concerns their partial combustion. A partial combustion process occurs because not enough oxygen (O2) is available to allow a full combustion of biomasses to take place. The gasifier is essentially a chemical reactor where various physical and chemical processes take place. The reactor is fed with biomasses that, in order to be digested, may need to be previously cut into pieces and need to have a moisture content below 20%. The gasifier generates “producer gas” which, once it is produced, cannot be stored and has therefore either to be burnt inside an appropriate burner or fed to diesel engines thus replacing diesel oil, furnace oil, other petroleum derivatives or firewood. The “producer gas” can, therefore, be used to generate both power (electricity) and thermal applications (hot or cold air), as shown respectively in flow diagram number 1 and 2 here after.

6 The chemical components of a producer gas, when derived from wood, are the following: CO 15÷20%; H2 15÷20%; CH4 up to 3%; N2 45÷50%; CO2 8÷12%.

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Flow Diagram n. 1 - Gasifier to produce electricity as main output Chillers and filters Electricity Hot air Electricity

120 KW Gasifier

Equipments + lightening system

(for a consumption up to: 90 kWe in 22 hrs)

100 kWe

Biomass Dryer

Hot Air Generator (HAG) Burner

Engine

Electrical Panel

(Hot air + exhaust gas mixture to dry 200 kg/h of biomasses in 22 hrs)

120 kWe

Exhaust Gas

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Flow Diagram n. 2 - Gasifier to produce electricity and hot air

Exhaust Gas

Chillers and filters Electricity Hot air

E Electricity Hot air

120 KW Gasifier

90 kWe(To operate the

flash dryer + other equipments during 10

hours)

60 kWe (To operate the flash drier

during 10-12 hrs )

100 kWe

Biomass Dryer

Hot Air Generator (HAG) Burner

Engine

Electrical Panel

Hot air from HAG to flash dryer

(7000 kg/22 hrs or 320 kg/hr to decrease moisture content from

40% to 10%)

(Hot air + exhaust gas mixture to dry 200 kg/h

of biomasses in 22 hrs)

120 kWe

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4.1.2. Bio-methanation technology (biogas) Bio-methanation (biogas production) consists in the generation of a mixture of combustible gases (methane/carbon, dioxide/hydrogen sulphide and ammonia) through anaerobic fermentation (bio-digestion or bio-methanation) of organic wastes (both liquid and solid). Combustible gases are then stored and turned into energy by means of an electrical generator. Three fermentation process can be used to digest different bio-wastes: wet, dry and biphasic ones, with a digestion time ranging from 10 to 40 days. In the case of wastewaters, the liquid fermentation process is used and the digestion period ranges between 16 to 120hs. The mixture of biogases generated through bio-methanation comprises, in volume terms: methane (CH4) 55÷80%; carbon dioxide (CO2) 20÷45%; hydrogen sulphide (H2S) 0÷1.5% and ammonia (NH3) 0÷0.05. A flow diagram showing the several steps (and facilities) required to process cassava effluents through anaerobic digestion is presented in the box here below.

Gas Storage Unit Electricity Generator

Biogas

Raw Treated Effluent

Effluent for aeration/disposal

Collection High Rate Anaerobic Sump Treatment System As mentioned in Part A, bio-methanization technology will be proposed in this study both in the case of an investment to produce electricity to be sold on the open market (“General Case”) and of a specific pilot proposed in the Asueyi community (“Pilot Plant” or “Application of the General Case”).

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Figure 4: Animals eating cassava peels

5. Environmental aspects related to the generation of bio-energy from cassava and other suitable wastes

5.1. Current state of affairs in Africa (including Ghana) Cassava wastes, due to the nature of their contents, are highly polluting bio-materials which can affect the environment in different ways: • As solid waste, given that peels and barks are rich in organic residues (fibers and

starch) and cyanides; • As gas (hydrogen cyanide); and • As liquid effluents, in view of their high content of cyanides, organic matters and

suspended solids.

The impact of cassava processing waste waters is particularly noxious on table-waters and surface waters. The financial costs to the environment and to the health of workers of the cassava industry and related to a poor disposal/management of cassava wastes have not been assessed yet. Nowadays, in Ghana, as in the other countries of the WCA region, the vast majority of cassava peels resulting from the processing of this root is either abandoned nearby processing sites, used as land fill or burnt. A fraction, difficult to estimate, is sun dried 7 (after having being washed, to remove dirtiness, and drained) and fed to pigs and goats.

As mentioned above, improperly managed disposal of cassava peels and of cassava effluents resulting from produce processing poses serious threats to the environment and, therefore, to human health. National government and local municipalities in Ghana and elsewhere in the WCA region are facing increasing difficulties in the treatment and disposal of cassava wastes. As for the other biological wastes targeted by this study, they include primarily wood sawdust and shavings, which in Ghana are mostly burnt or abandoned nearby wood processing sites. However, also biomasses different from those resulting from wood processing (such as maize leaves and stalks) could be considered to produce bio-energy in case wood wastes couldn’t be procured in the needed amounts. 7 As of today, the production of sun-dried cassava peels in WCA is limited to the dry season (November to March), when solar radiation is at its peak.

Fig. 3: Disposal of cassava peels/barks & wastewaters

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Figure 5: Maize leaves and stalks Figure 6: Wood wastes burnt near a

processing factory

5.2. Environmental aspects linked to the use of the gasification technology Emissions from the gasification of cassava have been recorded and compared to the maximum limits internationally set for these specific gases by the Central Pollution Control Board (CPCB)8 . As shown in Table 1 below, emissions resulting from the gasification of cassava bio-wastes are far below the permissible limits set by current international norms.

Table 1: Analysis of gasification emissions

GAS

PERMISSIBLE LIMITS AS PER CPCB NORMS

EMISSIONS OBSERVED ON CASSAVA

CO 1.2 g/MJ 0.4 – 0.6 g/MJ

NOX 2.2 g/ MJ 0.7 g/MJ

Hydro carbons 0.3 g/MJ 0.005 g/MJ

Particulate matter 0.2 g/MJ 0.005 g/MJ

Source: Central Pollution Control Board (CPCB). Additional positive aspects of this technology are the fact that the latter allows: (i) to properly dispose off/re-use very polluting bio-wastes and (ii) to burn them with a quite limited side-production of sulphurs –thus contributing to fight acid rains occurrence. In addition, the charcoal obtained as a result of the combustion of target biomasses can be reused to feed the gasifier or sold as a combustible material. In quantity terms, the charcoal obtained corresponds to about 4% of the biomass fed to the gasifier and has a calorific value below 5.5 Kcal/kg. Also ashes resulting from the combustion are not polluting and can then be disposed off in the soil (as fertiliser) without risks for the environment -about 1 g of ashes is obtained for each 1KWh produced. Furthermore, use of bio-electricity from cassava wastes decreases potential damages to forests as it reduces the overall amount of firewood employed to produce heat (for cooking or other purposes).

8For further details please visit: www.cpcb.nic.in/.

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Part C: Potential of producing bio-energy from cassava wastes and other biomasses in Ghana

6. Availability and requirements of cassava wastes

6.1. Cassava roots production in Africa and Ghana: some basic statistics According to FAO estimates (2006), world production of cassava roots stands at approximately 226 million MT, out of which 54% (122 million MT) are produced in Africa. In this specific context, West African countries produce the majority of cassava roots: 63 million MT, equal to 52% of the total African cassava production, followed by Eastern Africa countries with a production of approximately 31 million MT (or 25% of Africa’s total). As shown in the table below, with a yearly production of approximately 9.6 million MT, equal to 8% of the total cassava produced in Africa, Ghana is the third African largest producer.

Table 2: Key figures on Cassava Production in Africa (FAO, 2006)

Cassava processing and marketing

Key Figures on Cassava Production in Africa(FAOStat, 2006)

1196 382Others

1637 041 521Latin America & Caribbean

2767 011 365Asia

54122 088 128Africa

100226 337 396World

%MTGeographic area

Cassava production in the world

011 338Northern Africa

2328 057 653Middle Africa

2530 757 886Eastern Africa

5263 261 251Western Africa

100122 088 128Africa

%MTGeographic area

Cassava production in Africa

11 000 000Congo

22 200 000Ivory Coast

22 524 234Benin

89 638 000Ghana

1214 974 470DRC

3745 721 000Nigeria

100122 088 128Africa

%MTCountry

Major cassava production countries in WCA

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6.2. Ghana: availability of cassava wastes and other target biomasses to produce bio-energy In Ghana, out of a total projected production of 9,638,000 MT of cassava roots (2006), almost 2,000,000 MT are estimated to be wastes, of which ~1,300,000 MT (13%) peels and ~700,000 MT (7%) discarded roots and barks; residues that remain available for further utilization. In Ghana, cassava is traditionally cultivated by smallholder farmers; in the same way, its processing is usually done by small-scale processing units, scattered all over cassava production areas. This makes that cassava wastes in this country are available, with rare exceptions, in limited volumes, at traditional processing plants. The same stands true for other bio-masses potentially suitable for bio-energy production after they are mixed with cassava peels/barks, with the exception of wood shavings/sawdust which can be found in large volumes at wood processing sites, everywhere in the country. Also volumes of waste-waters resulting from the processing of cassava roots are usually negligible as availability of water at processing sites is still very limited.

In Ghana, as elsewhere in Africa, small farmers (mainly males) are mainly responsible for growing cassava, which is a year-round crop. Cassava roots are highly perishable and bulky, which makes their transport very expensive and their processing urgent. Processing is usually the responsibility of women who derive from the cassava paste several food products -such as, in the case of Western and Central Africa (WCA): gari, fufu, agbelima, starch and flour. Potential uses of cassava include also the production of: chips, pellets and alcohol. As of today, cassava derivatives are used by a wide range of industries such as those dealing with animal feed, textiles, bakery, confectionary, plywood and soft drinks. In terms of cassava by-products, the ones mostly available are: peels, foliage, starch bagasse, discarded roots, barks and wastewaters.

Fig 7: Ghana - Cassava peeling in the open area

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6.3. Ghana: Cassava waste requirements to implement the two target pilots

6.3.1. Gasification As previously highlighted, the gasifier will produce both electricity and hot air. The quantity of electricity to be produced will depend on the amount of hot air to be utilized either for just drying biomasses or for drying biomasses along with cassava derivatives (such as: flour, agbelima, starch etc). When just bio-masses to feed the gasifier are to be dried, the amount of electricity produced by the gasifier will be higher; the opposite will happen when also final cassava derivatives will have to be dried, as more heat will be required. Taking into consideration: (i) the limited amounts of cassava wastes (peels/barks) available at any given place in Ghana and (ii) the energy required to decrease from 66% to 20% the moisture content of the bio-masses to be gasified, a gasifier with an installed capacity of 120 KWh has been considered to be adequate to the needs addressed with this study. It has been, in fact, estimated that an installed capacity lower than 120 KWh would not allow a sustainable production of electricity, as most of the energy produced by the gasifier would not be used to produce electricity though rather to dry bio-masses for feeding the gasifier. A gasifier with an installed capacity of 120 KWh produces 500 m3/h of “producer gas”, equivalent to 550,000 Kcal/h; this requires a quantity of 200 Kg/h of dried biomasses. Box 1 here after shows the equivalence between raw and dried biomasses.

Equivalence between raw and dried biomasses A total of 200 kg/h of a biomass at 20% moisture is required to operate a gasifier with an installed capacity of 120 KW/h. The 200 kg/h of biomasses should include, in equal proportions, dried cassava peels/barks and dried wood shavings and saw dust to assure the maximum performance of the gasifier. To obtain 100 Kg of cassava peels/barks, with 20% moisture content, a quantity of 235 Kg (Kg 100*0.8/0.34) of raw biomass (with 66% moisture content) is required. In the same way, to obtain 100 Kg of wood shavings and saw dust duly mixed (with 20% moisture content), a total of 115 Kg (100*0.8/0.7) of raw biomasses with 30% moisture content are required. Thus, the quantity of water which needs to be evaporated is: (235+115) – 200 = 150 kg/h. As a result, the total amount of energy required for drying target biomasses is: 150 x {536 kcal (Latent Heat) + 80 kcal (sensible heat 100 - 20°C)} = 92,400 kcal/h. In case the dryer used shows a 60% efficiency in its operations, the heat required would be (92,400 kcal/h ÷ 0.6) = 154,000 kcal/h, corresponding to 3,388,000 Kcal/day.

Based on the above, Table 3 here below estimates the amount of raw biomasses needed to feed the 120 KWe gasifier during, respectively: 1 hour; 1 one day (of 22 working hours); and 1 year (of 330 working days), along with the equivalent amount in roots (expressed in tons) in the case of cassava.

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Table 3: Biomasses intake required to feed a 120 KW Gasifier

Installed Capacity KW/h 

Biomasses intake to feed a 120 KWe gasifier (Kg and/or MT) 

Kg/120 KW‐h  tons/120 KW‐h/day  tons/120 KW‐h/330 days a year  

Peels & Barks* 

Other  Bio‐masses  ** 

Cassava Peels & Barks*  Other Bio‐masses  **  Cassava Peels & Barks*  Other Bio‐masses  ** 

1 h  1 h  10h/d  16h/ d  22h/d  10h/d  16h/d  22 h/d  10h  16h  22h  10h  16h  22h 

Gross  

A) Total intake of raw biomasses (moisture content: cassava peels/barks 66% and sawdust/shavings 30%) 120  Kg 235  Kg115  T 2.35  T 3.76  T 5.17  T 1.15  T 1.84  T 2.53  T 776  T 1,241  T 1,706  T 380  T 607  T 835 

  B) Total intake of raw materials expressed as: cassava roots and wood wastes  120  Kg 1175  Kg 115  T 11.75  T 18.8  T 25.09  T 1.15  T 1.84  T 2.53  T 3,878  T 6,204  T 8,280  T 380  T 607  T 835 

  C) Total intake of raw biomasses once they are dried at a  20% moisture content 120  Kg 100  Kg 100  T 1.0  T 1.6  T 2.2  T 1.0  T 1.6  T 2.2  T 330  T 528  T 726  T 330  T 528  T 726 

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6.3.2. Bio-gas To digest wastewaters resulting from the cassava processing, a high rate anaerobic digester is proposed to be used (capable to convert about 80% of the wastewaters’ organic load –or BOD- into biogas in a lapse of time ranging from 24 to 72 hours). On average, the amount of wastewaters that can be expected from the production of the cassava derivatives targeted with this study is of 1 liter for each kilogram of cassava roots processed. In total, about 18,000 liters/day of wastewaters -with an organic load (BOD) of 3,400 – 6,000 mg/L, can be expected every day at the pilot plant hereby proposed; this corresponds to a generation of about 37-56 m3/h of biogas -depending upon wastewaters’ original organic load. Biogas from effluents is made up for a 65-70% by methane, which calorific value is between 5,800-7,200 Kcal/m3. As most of the waste is liquid and most of the biodegradable materials are in soluble form, a high rate anaerobic digestion can assure that: • The populations of those bacteria responsible for the anaerobic digestion remain high

and are retained inside the digester, which reduces the length of the digestion process to just few hours (see above);

• Energy is recovered from the cassava processing wastewaters up to a total amount of 334,425 Kcal/day.

The gas produced through anaerobic digestion can then be used to generate electricity for the unit or hot air for drying target biomasses and/or final food cassava derivatives.

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Part D. IFAD interventions in the cassava sector in Ghana

7. IFAD current and proposed interventions

7.1. Current interventions Through loans and grants, the International Fund for Agricultural Development (IFAD) has invested since 1980 a total of USD193.4 million into initiatives to reduce rural poverty in Ghana, thus making this country the second largest receiver of IFAD resources in WCA. Programmes and projects funded by IFAD cover a wide geographical area of this country and are designed to alleviate poverty and foster economic development. The overarching goal of IFAD's investments in Ghana is in fact “to enable poor rural people to improve and diversify their livelihoods in a sustainable manner”. IFAD aligns its assistance with the country's main policies and strategies for the agriculture and rural sector. Through its operations, IFAD targets specific development objectives within rural areas, including economic growth, gender equality, employment, service provision for human development, and governance for empowerment. In 2007, together with a group of 16 development partners, IFAD signed the Ghana-Joint Assistance Strategy (G-JAS), aiming at improving the alignment of development assistance with the core business of Government and with the Government’s political and partnership cycle. Since October 2009, IFAD has also been among the 15 signatories of the “Ghana’s Comprehensive Africa Agriculture Development Programme” (CAADP) Compact. This document renews the commitment of development partners to harmonize and align their assistance with the programmes and components of the Agriculture Sector Plan (2009-2015). In 2007, IFAD launched the “Regional Cassava Processing and Marketing Initiative” (RCPMI) for WCA, as a response to the call from African leaders, through the New Partnership for Africa’s Development (NEPAD), to accord priority to cassava in the regional agricultural development strategies. The RCPMI, which is currently funded through Italian and, to a much lower extent, Swiss and Finnish Government contributions, is being implemented in the context of the four national “Roots & Tubers (R&T)” development projects that IFAD is funding throughout the WCA region –specifically, in: Benin, Cameroon, Ghana and Nigeria. Since it started, the RCPMI has been providing IFAD-funded R&T projects in the WCA region with technical and financial assistance on issues related to cassava processing and

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marketing9. More specifically, in Ghana, the RCPMI has been collaborating with the “Roots and Tubers Improvement Marketing Programme/RTIMP”, an IFAD-funded project that has started its operation in 2007 and has its headquarter offices in Kumasi. RTIMP has among its main stakeholders and beneficiaries: the Ministry of Food and Agriculture, the National Food Research Institute, the GRATIS Foundation along with local small cassava producers, processors, traders and different kinds of providers of service to operators active within the cassava value chain. Among its activities, RTIMP (with also some ad-hoc support from the RCPMI) is also establishing several Good Practice Centres (GPCs) countrywide aimed at producing cassava derivates fully compliant with the standards set by domestic authorities responsible for food quality and safety. The GPCs are expected to gradually become demonstration centers for those local small entrepreneurs/processors who cannot be directly supported by RTIMP during the lifetime fixed for this project. Supply of water and energy at existing GPCs, located in the main cassava production/ processing areas, is very seldom catered for by public networks/grids. Water is, in fact, usually derived from rivers, collected in tanks from rain drains and, only in a few cases, pumped from dug-wells. Also supply of electricity from the available national grid is erratic. Diesel powered engines are therefore the most common way to (expensively) operate all equipments used in the cassava processing. Wood is also a major source of energy, although its use comes at a very high cost for the environment. Availability of a consistent and not too expensive supply of drinkable water and of energy constitute therefore a basic requirement for scaling up cassava processing operations in Ghana and the starting point for the research work covered under this paper.

7.2. IFAD proposals for setting up energy producing units from cassava processing wastes (biomasses and wastewaters)

7.2.1. Introduction As highlighted at Part A/Chapter 1, this study intends to assess the technical/financial feasibility of two plants: • A gasification plant to produce bio-energy through a gasifier with an installed

capacity of 120 kWe; and • A methanization plant (biogas) to produce bio-energy by means of an anaerobic bio-

digestor with an installed capacity of 18 000 lt/day. 9 The areas tackled varied considerably from one R&T project to the other and included issues such as: (i) stock taking, documenting and circulating good practices on cassava processing and marketing; (ii) setting up a regional (WCA) database on cassava equipment makers and their prototypes; (iii) introduction of new technologies; (iv) elaborating new approaches to the development of the cassava chain (including processing units prototypes for the production of several final derivatives and alternative ways for the different chain actors to increase their current degree of integration); (v) implementation of market information systems; (vi) elaboration of feasibility and market studies and trade strategies to support production and marketing of both traditional or new cassava derivates.

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For both the gasifier and the bio-gas plant, a separate technical/financial feasibility has been therefore carried out in the following pages. However, each of the two feasibilities comes as part of two options: • Option 1): General case: Production of bio-energy (electricity and heat) to be sold on

the local market to any potential interested buyer; • Option 2): Pilot plant (application): Production of bio-energy (electricity plus heat)

to be utilized in the context of a specific pilot recommended for implementation in the Brong-Ahafo region -more precisely, in the community of Asueyi.

Therefore, while point 7.2.2 below provides technical details on an intervention (general case) to produce electricity and heat to be sold on the domestic market, point 7.2.3 (specific pilot) describes a pilot suggested for implementation in the Asueyi community and meant to produce bio-energy (electricity plus heat) to be used by five cassava processing facilities operating inside this community. The pilot covered with option 2 is, therefore, a concrete application of the concepts presented in the general case (option 1) and is based on the information and data collected on site by the IFAD (RTIMP and RCPMI) mission. The financial analyses assessing the sustainability and profitability of both options are covered and presented separately at Chapter E here after.

7.2.2. The General Case As already specified at Part A/Chapter 1, the general case described in this study covers an investment into a gasification plant (“gasifier”) and a biogas plant to produce energy (and, to a very limited extent, also heat) to be sold on the domestic market to any interested potential (institutional or private) buyer. A brief description of the gasification and bio-gas technology and related flow diagrams have already been made in Part B/Chapter 4 (sub-chapters: 4.1.1 and 4.1.2). The reader is therefore asked to refer to these two sub-chapters for details on the technology and flow-charts proposed for the “General Case”. However, it is worth highlighting once more that, in the general case covered with this study, the technology described in Part B is used mostly for the production of electricity and, to a much lesser extent, for the production of heat (hot air) to dry target biomasses to be used as feedstock for the gasifier.

7.2.3. The proposed pilot plant in the Asueyi community (application) As previously highlighted, this paper proposes also the implementation, through an RTIMP and RCPMI joint effort, of a pilot in the community of Asueyi (municipality of Techiman, Brong-Ahafo region) to put into practice the general concepts presented with the study. The proposed pilot would concern five cassava processing groups (out of which one has already received technical and financial support from RTIMP) operating in this Asueyi community, which is one of the main cassava producing areas of Ghana.

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According to data collected during field missions, each of the existing five (5) processing groups has a capacity to process between 10 to 20 tons/day of raw cassava roots –or 50 to 100 tons/day for the five groups. Cassava peels and barks resulting from the processing of these amounts of roots can be then estimated between 10 to 20 tons/day. The five selected groups in the Asueyi community are located very close one another, to the point that sometimes they share processing equipments. Gari and starch are currently the main outputs of their operations. However, the groups are in the process of negotiating a deal with an import-export company based in Accra for the production of dried agbelima (fermented cassava paste) to be transported bulk to Accra and then exported after having been packaged into 1 Kg retail pouches. As no electricity is available from the public grid, all equipments are operated manually, with the exception of the grater operated with energy generated through a diesel engine. Water currently available for cassava processing is limited and totally derived from rains which are collected from roofs into plastic tanks; this makes water available at processing sites not fit for drinking purposes. However, table water is reported to be located at a reasonable depth. These constraints in the availability of basic inputs (energy and water) make it very difficult to either improve the quality of the traditional cassava derivatives or engage in the production of new derivates (such as the dried agbelima mentioned above). Roasting operations to produce gari expose workers (mostly women) to toxic fumes as women are forced to lean on the roasting pans to turn around gari, thus inhaling them. Through the proposed pilot, the energy to be generated from biomasses is expected to be used to operate:

• Pumps to extract water from table-water and to fill reservoirs, from where it will be spilled to wash peeled cassava roots and clean fermentation vats, pressing areas, floors and equipments. Use could also include the provision of drinkable water to nearby villages;

• Processing equipments (such as: graters, presses, centrifuges, sifters, ventilators of flash driers, milling facilities, air conditioners and office equipment). Motorized gari frying pans may be introduced to avoid workers exposure to hydrogen cyanide fumes. As motorized gari frying pans are much larger than traditional pans, their use should allow a decrease in gari production cost as outputs’ volumes would increase. The same wastewaters resulting from the operation of centrifuges would be dried with the flash driers to produce a starch of improved quality. In order to increase both the quantities of raw materials currently processed and the present quality of cassava derivatives, it will be necessary that the following extra-equipments and facilities integrate the proposed pilot in Asueyi community:

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• A flash drier, with a capacity of producing 5 tons/24 hours of dried product (starch, agbelima or flour) (~208 Kg/h of dried product with 8 to 10% of moisture content, equivalent to 310Kg/h of wet product/paste with 40 to 45% of moisture content);

• One electrical roaster, equipped with rotating paddles, s.s. pan (ø 2.5 m), fireplace and chimney, to test the new technology and show new practices for producing gari;

• A borehole, with a 6 m high overhead tank of 40,000 liters from which water would be distributed by gravity. The borehole would have to be sited in a way that all five processing groups can be easily served. Consistent availability of water, as much as electricity, would be essential to assure produce consistency of final products’ quality and sustainability of overall processing operations;

• A 4 m high shed (dimension 10m x 25 m) for the peeling, washing and fermenting operations. Each group would have access to 40 m², including washing basins;

• A 6 m high shed (dimension 10m x 20 m) where the following equipments would be installed: one flash drier (5,000 Kg of dried product/day); two centrifuges to reduce the moisture content of the cassava paste produced by the five processing groups, a milling device and a sifting machine. Storage space for packaging material and finished products would be also provided.

The main thrust for the proposed pilot is that larger volumes (from the current 1 MT/day to a planned 5 MT/day) and better quality of final cassava derivatives are going to be produced. A decrease in unitary production costs (thanks to both an increase in overall output and a lower energy input) is, in fact, the primary condition to be met to assure that the proposed investment can be financially sustainable in the long term –especially considering that prices of the target final cassava products are quite rigid on local markets and therefore difficult to significantly modify.

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PART E. Profitability of producing bio-energy in Ghana

E.1. General case: Outcomes of a Technical and Financial Analyses

E. 1.1. Technical Analyses

8. Heat requirements and utilization

The objective of the proposed investments is to produce 120 KWh of electricity from cassava wastes blended with wood wastes. Gasifier: Considering the energy required for producing electricity and hot air to dry target biomasses and to keep the system going, a gasifier with an installed capacity of 120 KW/h has been estimated to be required. However, out of the installed capacity, no more than 100 KW/h of net output can be expected, enough to produce 500 m3/h (or 11,000 m3/day) of “producer gas” equivalent. Out of these 100 KW/h of net output, a total of 15-20 kW/h will be used as captive power to run the equipments. In the same way, of the total hot air to be produced from the gasifier, a share will be employed for drying final cassava derivatives while the remaining share, together with the heat derived from the exhaust engine, will be used for drying target feedstock biomasses. More in particular, the total production of 11,000 m3/day of producer gas is expected to be utilized in the following way: • 6,600 m3/day to generate a gross power of 2,200 KWh/day (22 hours), corresponding

to 7,260,000 Kcal/day. Considering a captive power of 265 KWh/day, a net quantity of electricity equals to 1,935 KWh/day (or 88 KW/h) will remain available (on average) for sale on the local market, corresponding to 5,938 m3/day and 6,385,600 Kcal/day;

• 4,400 m3/day to generate heat, corresponding to a total of 4,840,000 Kcal/day. Considering the exhaust gas from the system equal to 806,819 Kcal/day, a total amount of heat corresponding to 5,846,810 Kcal/day will then be available from the gasifier. Out of this quantity, 3,388,000 Kcal/day will be used for drying feedstock biomasses and 2,258,810 Kcal/day as heat production surplus (available for sale).

The proposed gasifier system will be composed of a down draft gasifier, along with a gas cleaning and cooling system -to produce ultra clean gas for electricity and heat generation, a gas engine and an air generator. The full list of the equipments and materials, required to run the system is provided in the Annex 4 (along with a list of the civil works needed to put in place the gasifier), while the corresponding gasifier flow diagram is shown at Chapter 4 (Part B). Biogas plant: The plant taken into consideration with this study generates about 52.5 m³/day of biogas (equal to 334,425 Kcal/day). Considering that 12,912 Kcal/day will be absorbed by the system, a net volume of 301,513 Kcal/day (or 71 KWh/day and 23,430

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KWh/year), would remain available for use. The flow diagram of the proposed biogas plant for treating cassava effluents through anaerobic digestion is also shown at Chapter 4 (Part B). Table 4, here below, provides a summary of the heat generated and used by both the gasifier and the bio-gas plant and, at the same time, estimates the heat that would remain available for sale on the domestic market.

Table 4: Heat balance and equivalence System Generation/Production/Consumption Corresponding volume

Unit 22 h/day Year/330d m³/day Kcal/day Kwh/d Gasifier

Gross Net Gross Net Diesel

L/d Kwh/y LDiesel/y Tons

Firewood/y Producer gas 11,000*

Electricity generation Energy production 6,600 7,260,000 2,200 726,000 Captive power 795 874,500 265 87,450 Net production 5,938 6,385,500 1,935 Net power 1,935 637 638,368 210,210 Total 210,210

Heat Generation Gross production 4,400 4,840,000 Exhaust gas 806,810 Total production 5,646,810 Drying biomass 3,388,000 Net production Drying product Balance to be sold 2,258,810 (225) 74,250 1,485 Total 225 74,250 1,485 Unit 22 h/day Year/330d

Kcal/day Kwh/d Biogas m³/day

Gross Net Gross Net Diesel

L/d Kwh/y Diesel/L

Biogas Biogas/methane 52,50

**

Heat production 334,425 78.75 System absorption 32,912 7.75 Net production 301,513 71.00 23,430 Equivalence 23 7,710 Total 7,710 * Calorific value of producer gas: 1,100 Kcal/m³. ** Calorific value of biogas/methane = 70% of methane = 6,370 Kcal/m³.

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E. 1.2. Financial Analyses

9. Profitability of the proposed investments

9.1. Generalities This section provides for a detailed analysis of the profitability of the investments required to produce bio-energy from all bio-wastes previously described. As mentioned earlier on, a separate analysis has been undertaken in the case of the gasifier and of the biogas, so as to provide a detailed and separate description of the profitability for each of two proposed investments. In order to estimate revenues, it has been necessary to convert the total energy (electricity plus heat) generated by the gasifier and the biogas plants -and expressed into Kwh and Kcal- into liters of diesel and tons of firewood. The reason why diesel and firewood have been chosen (as shadow prices) to estimate the revenues is that on the Ghanaian market diesel is, at the moment, the fossil fuel mostly used for energy generation, as firewood is for heat production (especially in rural areas). Therefore, the domestic market price for diesel has been retained as the referential price for estimating the value of the electricity generated by target investments, while the one for firewood has been retained for estimating the value of the heat produced.

9.2. Total energy expected to be produced The total energy expected to be produced by the proposed gasifier is 7,260,000 Kcal/day, of which 874,500 Kcal/day (or 12%) are assumed to be consumed by the system as “captive power”. Therefore, the resulting quantity of energy produced by the gasifier and available for sale corresponds to 6,385,000 Kcal/day (88%), equal to 638,368 Kwh/y (equivalent to 210,210 liter of diesel/year). With reference to the heat generated, a total production of 5,646,810 Kcal/day (including gross production and exhaust gas) is expected, assuming that the plant will be working 22 hours/day for a total of 330 days/year. The amount of heat remaining available for sale (once the heat required to dry biomasses is deducted), stands at 2,258,810 Kcal/day, equivalent to 1,485 tons of firewood/year. The biogas plant proposed with the pilot is expected to produce a total of 334,425 Kcal/day, out of which 32,912 kcal/day will be reused by the same plant. Therefore, a total of 301,513 Kcal/day -equal to 23,430 Kwh/year or 7,710 liter of diesel/year- would be available for sale on local market.

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9.3. Key information and main assumptions for implementing financial analyses for both the gasifier and the bio-gas plant

Key information

Gasifier Total investment costs: 340 000 USD, to be entirely borrowed from local banks at a 22%

interest rate and to be paid back through equal installments (capital) plus interests on the remained debt over a period of 7 years10;

Civil works, including assistance to installation and commissioning, have been also considered as part of fixed costs and estimated at 40 000 USD;

Depreciation: 10 years for equipments and 15 years for civil works; Working capital: about USD 10 000. Expected to be needed during the first four months

of Y1 to pay off short-term liabilities; Timeframe for the analysis: 10 years.

Bio-gas plant

Total investment costs: 28 880 USD, out of which about USD 21 000 for purchasing the equipments and USD 7 500 for civil works. The entire amount is expected to be borrowed from local banks at a 22% interest rate and to be paid back through equal installments (capital) plus interests on the remaining debt over a period of 7 years;

Civil works, including assistance to installation and commissioning, have been also considered as part of fixed costs and estimated at USD 7 500;

Depreciation: 10 years for equipments and 15 years for civil works; Working capital: about USD 800. Expected to be needed during the first four months of

Y1 to pay off short-term liabilities; Timeframe for the analysis: 10 years.

Main assumptions (for both gasifier and bio-gas plant)

i) Cost of diesel: 1,18 GHS /liter equivalent to 0,8 USD/liter; ii) Price of electricity available from the public grid: GHS 0,47/Kwh, equals to USD

0,335 Kwh – including VAT and NHS; iii) Processing plants working hours: 22 hours/day for 330 days/year. Start up costs,

in terms of fuel requirements and annual operation and maintenance costs have been included;

iv) Revenues: derived based on the following sales’ projections: • Gasifier: a total of 638,368 Kwh/year, equivalent to 210,210 liters of diesel/year,

are sold at 0.8 USD/lt (which is the current market price for diesel). As for the heat, a total of 2,258,810 kcal/day, equal to 1,485 tons of firewood/year, are sold at 15 USD/t;

• Biogas: a net production of 23,430 Kwh/year, equal to 7,710 lt diesel/year, is sold at 0.8 USD/lt -which is the current market price in Ghana for diesel, that is normally used to produce electricity;

10 This assumption is built on the lending terms currently enforced in Ghana.

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v) Interest rates applied: • Passive: the average passive interest rate applied in Ghana is equal to 23%

(including administrative fees11) for industrial investments. As for the agricultural investments12 it decreases to 22%;

• Active (on deposits): 10%13 on average; vi) Discount rate (to discount expected annual cash flows at Y1): 22% (equal to

passive interest rate applied to agribusiness investments); vii) Price of fresh cassava roots: 50 GHS/t (equal to approximately 35 USD/t), which

is an average price estimated to well reflect market price variations occurring during the rainy and the dry seasons;

viii) Transport costs of bio-masses (i.e. cassava peels and barks, maize stalks and leaves and Shea nuts) from production sites to the plant site: 15 GHS/t, equivalent to approximately 10 USD/t including both fuel and remuneration of the workforce (one driver and one unskilled worker) required to transport target biomasses;

ix) Transport costs of equipments and materials –from India to Accra, along with assembling and start-up/training costs: included as part of the fixed costs;

x) Social security costs calculated as 13.5% of the employees’ monthly gross salary; xi) Taxes on incomes: although in Ghana they stand at 25%14 in the case of private

enterprises, a rate of 10% was used in this study being this the rate reported to be applied in the region (Brong-Ahafo) targeted with this paper;

xii) National taxes on Value Added in Ghana stand at 12.5%, while the National Health Service tax is at 2.5%.

9.4. Outcomes of the financial analysis

9.4.1. Gasifier The technical and financial analyses refer to an investment timeframe of 10 years and are included in Annex 3. Main elements considered in the analyses, along with the obtained outcomes, are summarized here below: Total costs (including investment costs for about 340 000 USD, along with capital

and operating costs) show a steady decrease over the 10 years period, from approximately USD 184 000 in Y1 to approximately USD 60 000 in Y10;

Estimated yearly repayments of capital for implementing the investment (purchase of equipments and construction of facilities) and on working capital, along with related interests, range then from USD 123 000 in Y1 to USD 60 000 in Y7;

Net profits after corporate taxes are positive already starting from Y1 at approximately 6 000 USD. They increase up to approximately USD 114 000 in Y10;

Annual cash flows remain positive over the entire life of the investment. More specifically, the annual cash flow is approximately USD 38 000 in Y1 and approximately USD 146 000 in Y10. Also the analysis of discounted annual cash flows confirms satisfactory results throughout the entire life of the investment;

11 As of August, 2010, Ghana Commercial Bank. 12 As per information provided by the Agricultural Development Bank, which specifically finances investments in the rural areas of Ghana. 13 Source: Bank of Ghana Notice No. BG/GOV/SEC/2010/11. 14 As of August, 2010.

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The internal rate of return (IRR) of this investment results to be 17%, while the pay back period is slightly less than 6 years. These two values clearly show the positive returns to be expected from this investment -as previously highlighted, interests accrued on bank accounts in Ghana are at around 10%;

A sensitivity analysis has been carried out using two different scenarios: (i) a ±15% variation of the investment costs15 and (ii) a 20% decrease in the market price of energy. Under the first scenario, when total investment costs increase +15% to equal 391 000 USD, net profit after taxes results to be positive as from Y3 (equal to approximately 7 000 USD), while annual cash flow become positive already from Y2 (approximately 30 000 USD). IRR results to be equal to 11% and the investment can be paid back in approximately 7 years (slightly more than in the previous case). Under the hypothesis of total investment costs equal to 289 000 USD (-15% variation), net profit after taxes results to be positive already from Y1 (equal to approximately 27 000 USD) and increases up to approximately 118 000 USD in Y10. Also annual cash flows results to be positive from Y1 (approximately 53 000 USD). IRR results to be 24% and the investment pay back period less then 5 years. Under the second scenario, a 20% reduction of the diesel market price has been considered (market price equal to 0.64 USD/lt), while the market price of a ton of firewood has been assumed to remain stable. Net profit after taxes results to be positive from Y4 (equal to 4 600 USD), while annual cash flow becomes positive as from Y1 (approximately 4 700 USD). IRR results to be equal to 7% and the investment pay back period becomes less than 8 years.

9.4.2. Biogas plant The technical and financial analyses refer to an investment timeframe of 10 years and are included in Annex 4. Main elements considered in the analyses and outcomes obtained are summarized here below16:

• Investments costs for equipments and materials: approximately USD 28 800, including about USD 21 000 for the equipments and USD 7 500 for civil works;

• Depreciation timeframe: 10 years for equipments (approximately 2 000 USD/ year) and 15 years for civil works (300 USD/year);

• Estimated yearly repayments (over a seven year period) of capital borrowed for implementing the investment (purchase of equipments and construction of facilities and on working capital), along with related interests (22%/year), range then from approximately USD 10 400 in Y1 to USD 5 000 in Y7;

• Production costs, including fixed and variable costs, for generating a total of 23 430 kwh/year -equivalent to 7 710 liters of diesel: USD 4 745;

• The flow of net profits (after payment of corporate taxes equal to 12.5% of total profits) becomes positive as from Y8 at about USD 1 200, which remains stable till Y10.

15 Capital costs have been derived accordingly. 16 Given the technical specification of the biogas plant, the outcomes of these analyses can (and will) be used also for the concrete application relating to the pilot proposed for the Asueyi community. However, this is not the case of the specific economic/financial feasibility analysis for the gasifier, for which a separate analysis is required (and implemented in Part E.2: “Case study”).

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E.2. Pilot Plant (Application): Outcomes of a Technical and Financial Analyses

E. 2.1. Technical Analyses

10. Electricity and heat total requirements and expected uses

Electricity total requirements and expected uses

The underlying assumption of the Asueyi pilot plant is that it will process 25 tons/day of raw cassava roots into 7 tons/day of cassava paste (with a 40 to 45% moisture content), to be then flash-dried into about 4-5 tons/day of high quality dried cassava products. All the electricity needed to run equipments and the hot air needed to dry the biomasses to be burnt in the gasifier along with the finished cassava food derivatives to be marketed, is expected to be derived from target biomasses. Table 5, here below, summarizes the total quantity of heat required to process 25 tons/day of cassava roots. As per the amounts of cassava roots, raw biomass and dried biomasses required to feed the gasifier proposed to be set up in the context of this pilot (always with an installed capacity of 120 KW), they would be the same as those calculated for the “General Case” in Table 3 (Part C/sub-chapter 6.3.1). In the context of the pilot planned in the Asueyi community, electricity is required for operating electric motors of the processing plants making up the pilot unit (graters, sifters and centrifuges), ventilators of the flash dryer, motorized roasters, the water pump and the lighting of offices, working areas etc. The maximum quantity of electricity absorbed by the pilot plant has been estimated at about 100 kW/h. However, data on consumption have been estimated considering a consumption of up to 90 KW/h during 10 hours and up to 60KW/h during 10-12 hours, when only one centrifuge, the ventilators (of the flash drier), the miller and the plant’s lightening grid would be operated –the centrifuge and the miller are, in fact, not expected to run continuously). Electricity consumption of single equipments has been estimated, at their peak, equals to: 28 KW/h for the flash drier; 11 KW/h for the centrifuge; 20 KW/h for the grater and/or the sifter; 5 KW/h both for both the roasting pan and water pump. Electricity for running the flash drier, set up to produce 4-5 MT/day of dried final food products, will be needed for a maximum of 22 hours/day, while electricity for operating graters and sifters will be required for few (2-3) hours/day only. All other equipments will be operated according to needs and the energy required correspondingly. The net consumption of electricity for a working day of 22 hours is expected to be about 65 KW/h (or 1,425 KWh/day), which correspond to 4,275m³/day of producer gas or 4,702,500 Kcal/day. The features of the product to be dried in the context of the pilot plant in Asueyi community are as it follows:

• Initial moisture level of the wet paste after centrifugation (40% to 45%)

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• Final moisture content of dried cassava derivatives: 8% to 10% • Total quantity of wet products to be dried: 7 tons/day (or 16 hours) • Total quantity of final (dried) output: 4.5 tons/day (or 22 hours) • Hot air required for drying (180°C) wet material: 3585 m³/h

The energy required to decrease by 30% the moisture content of the 7000 kg/day of wet cassava paste is calculated at: 2,156,000 kcal/day (or 98,000 kcal/h), as per the following calculations:

• Total quantity of water to be evaporated from the 7000 kg/day of wet cassava paste = 7000 X 0.3 = 2100 kg/day

• Energy required to evaporate the quantity of water above: 2100 kg/day x {536 kcal (Latent Heat) + 80 kcal (sensible heat 100-20°C)} = 1,293,600 kcal/day. This amount increases to 2,156,000 kcal/day (1,293,600 kcal ÷ 0.6) or 98,000 kcal/h assuming that the dryer operates at a maximum efficiency of 60% and during 22 hours/day respectively

Heat total requirements and expected uses

A 120 KW/h gasifier, to be used to both generate electricity and hot air- has been considered for this investment. However, out of this installed capacity, no more than 100 KW/h of net output can be expected (of which about 15-20 kW/h are to be used as captive power), enough to produce 500 m3/h of producer gas equivalent (equal to 550,000 Kcal/h). In a day of 22 working hours, 11,000 m3/day of producer gas will be produced, corresponding to 12,100,000 Kcal/day. As the heat generated from the engine exhaust gas 17 in a day of 22 hours will be 1,125,868 Kcal/day, the total daily amount of kilocalories generated by the gasifier will be 13,225,686 Kcal/day. The 11,000 m3/day of producer gas are expected to be utilized as it follows: • 4,860 m3/day to generate electricity, equivalent to a total amount of gross power of

1,620 KWh/day (22 hours), corresponding to 5,346,000 Kcal/day. Considering a captive power of 195 KWh/day, a net balance of 1,425 KWh/day will remain available to meet the electricity needs of the pilot, corresponding to 4,275 m3/day (or 4,702,500 Kcal/day);

• 6,140 m3/day to generate heat for drying biomasses and final products, corresponding to a total of 6,754,000 Kcal/day. To this amount it should be added an additional quantity of 1,125,868 Kcal/day as exhaust gas produced by the gasifier. The total available heat generated by gasifier would then be 7,879,868 Kcal/day, of which 2,156,000 Kcal/day (corresponding to 1,973 m3/day) would be used for drying finished food derivatives (agbelima, flour, starch, etc.) and 3,388,000 Kcal/day (or 3,080 m3/day) for drying biomasses. A total amount of 2,335,868 Kcal/day (or 2,123 m3/day) would remain available for sale as heat surplus.

17 If an 120 KWe engine is used for generating power, the heat contents (at full load) of the exhaust gas can be so calculated: (a) Gas + air required for the 120 kW engine = 120 x 7.8 kg = 936 kg; (b) Total flue gas quantity of 120 kW engine: 2035 m3/h (936 kg/h) @ 450°C; (c) Heat required for drying purposes -from 450°C to 120°C (∆T 330°C)- corresponds to m cp ∆T = 936 x 0.27 x 330 = 83,397 kcal/h.

31

Table 5: Heat balance and equivalence System Generation/Production/Consumption Corresponding volume

Unit 22 h/day Year/330days m³/day Kcal/day Kwh/d Gasifier Gross Net Gross Net

Diesel L/day

Kwh /year

LtDiesel /year

Tons Firewood/y

Producer gas 11,000* 12,100,000 Electricity generation Total production 4,860 5,346,000 1,620 534,600 Captive power 585 643,500 195 Net Product. 4,275 4,702,500 Net Power 1,425 469 470,250 154,770 Heat Generation Gross production 6,140 6,754,000 Exhaust gas 1,125,868 Total production 7,879,868 Drying biomass 3,388,000 Net production 4,491,868 (448) Drying product 2,156,000 215 70,960 Balance to be sold 2,335,868 (233) 1,485

Total 684 225,730 1,485

Unit 22 h/day Year/330d Kcal/day Kwh/d Biogas m³/day

Gross Net Gross Net Diesel

L/d Kwh/y Diesel/L

Biogas Biogas/methane 52,50** Heat production 334,425 78.75 System absorption 32,912 7.75 Net production 301,513 71.00 23,430 Equivalence 23 7,710

Total 7,710 * Calorific value of producer gas: 1,100 Kcal/m³; ** Calorific value of biogas/methane = 70% of methane = 6,370 Kcal/m³. It is recommended that both gasification and biogas plants be located in a central position as far as the five target processing groups in Asueyi community are concerned, so as to easily distribute produced energy to the same groups and collect from them, by gravity, waste waters to be fermented inside the bio-gas plant.

32

E. 2.2. Financial Analyses

11. Overall outcomes of the proposed investments

11.1. Generalities The outcomes of the financial analysis concerning the application in the Asueyi community are provided in the following paragraphs. The analysis focuses on the specific profitability of the gasifier only as the profitability of the biogas plant does not differ from the one estimated at chapter E.1 (under the: “General Case”). The financial analysis has been worked out using the data and information (including availability of bio-masses) collected during field works in the geographic area proposed for the investment covered with this study. Also some of the assumptions outlined in Part E, Chapter 9 and used to assess the profitability of the general case have been adapted to circumstances encountered in the Techiman Municipality18.

11.2. Key information and main assumptions for implementing financial analyses for the gasifier

Key aspects (Gasifier only)

Total investment costs: 340 000 USD, to be entirely borrowed from local banks at a 22% interest rate and to be returned through equal installments (capital) plus interests on the remaining debt over a period of 7 years19;

Working capital: about USD 10 000, expected to be needed during the first four months of Y1 to pay off short-term liabilities;

Timeframe for the investment: 10 years; Depreciation: 10 years for equipments and 15 years for civil works; Revenues expected to be generated from the gasifier in the Asueyi community have

been so estimated: • The entire amount (470,250 Kwh/y) of electricity produced, corresponding to

154,770 lt/year of diesel, to which has been added an additional amount of 70,960 lt diesel/year derived as heat generated by the plant and used to dry products, are sold at 0.8 USD/lt (which is the current market price in Ghana for diesel); and

• The remaining 2,335,868 kcal/d deriving from the heat generated (and equal to 1,485 t firewood/y) are sold at 15 t/USD (which is the market price for firewood that is usually used in Asueyi to produce heat).

18 If not specified, the assumptions described in the previous sections do not change. 19 This assumption is built on the current practices in Ghana

33

11.3. Outcomes of the financial analysis in the case of the gasifier The outcomes of the technical and financial analyses detailed in Annex 5 here after and implemented over a timeframe of 10 years, show that: • Total costs20 show a steady decrease over the 10 years period, from approximately

USD 184 000 in Y1 to approximately USD 60 000 in Y10. By far and large, capital costs are the main item (60%) of the total cost structure;

• Working capital, expected to be needed during the first four months of Y1 to pay off short-term liabilities, has been included at approximately USD 10 000;

• Estimated yearly repayments of capital for implementing the investment (purchase of equipments and construction of facilities) and on working capital, along with related interests, range then from USD 123 000 in Y1 to USD 60 000 in Y7;

• Net profits after corporate taxes are constantly positive, ranging from approximately USD 17 000 in Y1 up to approximately USD 125 000 in Y10;

• Annual cash flows remain positive over the entire life of the investment. More specifically, the annual cash flow stands at approximately USD 48 000 in Y1 and it increases up to approximately USD 156 000 in Y10. Also the analysis of discounted annual cash flows confirms satisfactory results throughout the entire life of the investment as from Y1;

• The internal rate of return (IRR) of this investment results to be 21%; the pay back period is slightly less than 5 years. These two indicators clearly show the high returns to be expected from this investment;

• A sensitivity analysis has been carried out taking into consideration: (i) the possibility to sell the total amount of heat generated, equal to 2 970 liter of diesel/year, at the prevailing market price for firewood (15 USD/t) and (ii) a 20% decrease in the total working hours of the gasification plant (from 22h/day to 18 h/day) during a total period of 330 working days/year. Under the first scenario, net profit after taxes result to be positive as from Y3 (equal to about 5 000 USD), while annual cash flow starts being positive as from Y1 (approximately 16 000 USD). IRR is 11%; the pay back period approximately 7 years. Under the second scenario, the plant works a total of 18h/d only, which causes a 20% decrease in the quantity of electricity generated (from 154,700 lt diesel/year to 128 816 lt/diesel/year), as well as of the heat generated and required to dry products (from 70 960 to 56 768 lt/diesel/year and from 1 485 to 1188 tons of firewood/year) and therefore a reduction in the level of total revenues. Given this reduction in total working hours, the overall amount of high quality (dried) cassava derivatives decreases from almost 4.5 tons/day to approximately 3.5 tons/day. Total revenues are equal to 162 287 USD/year, so derived: 99 053 USD/year from the sale of electricity and 62 234 USD/year from the sale of the heat generated. Net profits after taxes become slightly positive in Y3 and increase to approximately 90 000 USD in Y10, while annual cash flow remains always positive throughout the 10-year timeframe (from approximately 10 250 USD in Y1 to approximately 120 000 USD in Y10). IRR decreases to 10% and the paid back period results to be less than 8 years. Therefore, also under the hypothesis of a 20% decrease of total revenues, the sensitivity analysis confirms the good profitability for the proposed investment.

20 These include: capital costs, operating costs and fixed costs and are equal to USD 340 000.

Annexes

1

Annex 1 - Results of the laboratory analyses on cassava peels and barks

Table 1: Proximate analysis and basic properties on cassava peels

Cassava peels have low ash content (<5%) and an ash fusion temperature above 1200°C. Their bulk density remains above 250 kg/m3 even after drying and hence flow easily and burn well. Peels have a high moisture content that has to be decreased to 20% to make them suitable for gasification purposes.

Ankur Lab Polytechnics Lab Parameters

Dried sample Wet sample

Moisture, % 2.16 66.20

Ash, % of dry wt. 3.41 4.94

Volatile, % of dry wt. 78.28

Fixed carbon, % of dry wt. 18.31 } 95.06

Bulk density, kg/m3 286 340

Ash fusion test No ash Fusion at 1200°C No ash Fusion at 1200°C

Shape & Size, % Irregular shape Irregular shape

Ignition test Burns easily NM

Flow ability test Flows easily NM

2

Annex 2 - Results of the laboratory analyses on wood shavings and sawdust

The table here below shows the results of the analyses conducted in two different laboratories on a blend of wood shavings and saw dust.

Table 1: Proximate analysis and basic properties of wood shavings & saw dust mixture

The mixture of wood shavings and saw dust has a low ash content (<5%) and an ash fusion temperature above 1200°C. Its bulk density is low and it does not flow easily; however, it burns well. The high moisture content and the low bulk density of this blend makes it unsuitable for gasification; however, after having dried the mixture to 20% moisture level and having mixed this latter with dried cassava peels, it can be proficiently used for gasification purposes.

Ankur Laboratories Polytechnics Lab. Parameters

Naturally dried sample Wet sample

Moisture, % 19.83 30.60

Ash, % of dry wt. 1.29 2.33

Volatile, % of dry wt. 78.59

Fixed carbon, % of dry wt. 20.12 } 97.66

Bulk density, kg/m3 68 95

Ash fusion test No ash Fusion at 1200°C No ash Fusion at 1200°C

Shape & Size, % Irregular shape Irregular shape

Ignition test Burns easily NM

Flow ability test Does not flow easily NM

3

Annex 3 - Financial analysis: Gasifier – General level Investment Costs Equipments and materials

Item Quantity Value Depreciation (years)

Depreciation / (years)

‘Ankur’ Biomass Gasifier Model WBG-200 in Ultra Clean Gas Mode (including necessary accessories and auxiliaries) 1 76.588 Cummins GTA-855-G engine (modified to work on Producer Gas) with a Gross output of 120 kWe on Producer Gas in the grid connected mode 1 65.509 Manually controlled Producer Gas Burner 1 1.649 Parallel line of filters for continuous operation 1 Set 6.485 Gasifier Cooling Tower lump sum 5.496 Engine Cooling Tower 1 5.825 Skip Charger with double feed door assembly for feeding raw materials to the gasifier (from ground level to the gasifier feed door) 1 8.024 Moisture Meter 1 176 Biomass Drying Arrangement (Based on engine Exhaust) 1 8.024 Dry Ash Char Removal System (Actual handling of ash/char from gasifier area to final disposal/storage point will be in customer’s scope) lump sum 6.485 Gas Cooler (M.S. Construction) 1 3.957 7 TR Chiller 1 7.694 Water Treatment Plant lump sum 7.694 Platform, Ladder for the gasifier 1 Set 2.748 Biomass Dryer 1 9.892 HAG for Flesh dryer 1 16.487 Electric generator 30Kwh with diesel tank 1 19.785 Grid for public distribution system lump sum 12.310 Spare parts, lubricating oils, filters for 2 operations years lump sum 4.397 Packing Charges for the system lump sum 4.397 Sub total equipments and materials 273.620 10 27.362

4

Transport cost of equipments and materials to the site (including insurance) lump sum 13.190 Assembling and commissioning (including 15 working days training) lump sum 13.190 Sub total transport costs, assembling and commissioning 26.379 Total equipments and materials including transport costs and commissioning 300.000 10 30.000 Gasifier shed area mt (14x8x9) lump sum   Cooling Pond area (mt) (4x4.5x2) lump sum Fencing including gate (mt) - including gates lump sum Total Civil Works (including technical assistance and other installation charges)

40.000 25 1.600

Total Investment Costs 340.000 Total depreciation per year 31.600

Operating Costs 1st year 2nd year 3rd year 10th year Item Quantity Unit value Cost/USD Cost/USD Cost/USD Cost/USD Biomass -cassava peels with 66%RH - t/y (232 kg/120Kwh x22hx 330d) equivalent to 25t/d of raw cassava 1.706 Other biomasses 20% RH t/y (wood waste, maize waste) (115Kg/120Kwh x 22h x 330 d) equal to 2.2 t/d 835 Raw material transportation cost: USD/t 10 8.349 8.349 8.349 8.349 Diesel for start-up 2.500 0,80 2.000 2.000 2.000 2.000 Unskilled labor (cost/month) 9 65 7.020 7.020 7.020 7.020 Labor supervisor (cost/month) 1 150 1.800 1.800 1.800 1.800 Lube Oil Requirements lump sum 2.000 2.000 2.000 2.000 Operations and Maintenance lump sum 7.500 7.500 7.500 7.500

Total operating cost (USD) 28.669 28.669 28.669 28.669 Total annual production costs (variable+fixed costs) 60.269 60.269 60.269 60.269 Working capital requirements 9.556 0 0 0 Capital costs (fixed investment) 108.800 101.320 93.840 41.480 Total capital costs 123.371 112.686 102.000

5

Financial Analysis

ITEM 1st year 2nd year 3rd year 4th year 8th year 9th year 10th year Investment costs 31.600 31.600 31.600 31.600 31.600 31.600 31.600Operating costs 28.669 28.669 28.669 28.669 28.669 28.669 28.669Capital costs 123.371 112.686 102.000 91.314 Total costs 183.640 172.955 162.269 151.583 60.269 60.269 60.269Total revenues 190.443 190.443 190.443 190.443 190.443 190.443 190.443Gross profits 6.803 17.488 28.174 38.860 130.174 130.174 130.174Corporate taxes (12.5%) 850 2.186 3.522 4.857 16.272 16.272 16.272Net profits after taxes 5.952 15.302 24.652 34.002 113.902 113.902 113.902Annual cash flow from gasifier 37.552 46.902 56.252 65.602 145.502 145.502 145.502Discounted annual cash flow (22%) 38.444 37.794 36.128 36.170 29.648 19.919IRR 17% Pay back period (years) 6

6

Sensitivity Analysis

Hp 1: 15% Increase in investment costs (new investment 391000 USD) ITEM 1st year 2nd year 3rd year 4th year 8th year 9th year 10th year

Investment costs 36.600 36.600 36.600 36.600 36.600 36.600 36.600Capital costs 141.877 129.589 117.300 105.011 Operating costs 28.669 28.669 28.669 28.669 28.669 28.669 28.669Total costs 207.146 194.858 182.569 170.280 65.269 65.269 65.269Total revenues 190.443 190.443 190.443 190.443 190.443 190.443 190.443Gross profit -16.703 -4.415 7.874 20.163 125.174 125.174 125.174Corporate taxes (12.5%) 984 2.520 15.647 15.647 15.647Net profit after taxes -16.703 -4.415 6.890 17.642 109.527 109.527 109.527Annual cash flow 19.897 32.185 43.490 54.242 146.127 146.127 146.127Discounted annual cash flow (22%) 26.821 30.201 31.390 40.781 33.985 28.320IRR 11% Payback period (years) 7

Hp 2: 15% Decrease in investment costs (new investment 289 000 USD) ITEM 1st year 2nd year 3rd year 4th year 8th year 9th year 10th year

Investment costs 26.600 26.600 26.600 26.600 26.600 26.600 26.600Capital costs 104.866 95.783 86.700 77.617 Operating costs 28.669 28.669 28.669 28.669 28.669 28.669 28.669Total costs 160.135 151.052 141.969 132.886 55.269 55.269 55.269Total revenues 190.443 190.443 190.443 190.443 190.443 190.443 190.443Gross Profit 30.308 39.391 48.474 57.557 135.174 135.174 135.174Corporate Taxes (12.5%) 3789 4924 6059 7195 16897 16897 16897Net profit after taxes 26.520 34.467 42.415 50.362 118.277 118.277 118.277Annual cash flow 53.120 61.067 69.015 76.962 144.877 144.877 144.877Discounted annual cash flow (22%) 50.055 46.368 42.384 36.015 29.520 24.197IRR 24% Payback period (years) 4,5

7

Hp 3: 20% Decrease in the market price of diesel, new price/lt 0.64 lt 1st year 2nd year 3rd year 4th year 8th year 9th year 10th year

Investment costs 31.600 31.600 31.600 31.600 31.600 31.600 31.600Operating costs 28.669 28.669 28.669 28.669 28.669 28.669 28.669Capital costs 123.371 112.686 102.000 91.314 Total costs 183.640 172.955 162.269 151.583 60.269 60.269 60.269Total revenues 156.809 156.809 156.809 156.809 156.809 156.809 156.809Gross Profit -26.831 -16.145 -5.460 5.226 96.540 96.540 96.540Corporate Taxes (12.5%) 653 12.068 12.068 12.068Net Profit after taxes -26.831 -16.145 -5.460 4.573 84.473 84.473 84.473Annual cash flow from gasifier 4.769 15.455 26.140 36.173 116.073 116.073 116.073Discounted annual cash flow (22%) 12.668 17.563 19.921 28.854 23.651 15.890IRR 7% Pay back period 8

8

Annex 4 - Financial analysis Biogas Plant Investment Costs Equipments and materials

Item Quantity Unit value Total value Depreciation

(years) Depreciation/year

Cost of mechanical/fabrication work for packing media support structure, digester cap, gas holder etc. 1 set 6.997 6.997

Cost for pumps, piping, fittings, valves etc. lump sum 2.389 2.389 Biogas engine generator (15 Kwh) 1 7.368 7.368 Charges for design and engineering and guidance lump sum 3.500 3.500 Sub total equipment and materials ―  20.254 10 2.025 Assembling and commissioning (including 15 working days training) lump sum 1.053 1.053 Total equipments and materials (including other expenses) ―  21.307 Tot Civil works lump sum 7.500 25 300 Total investment costs (USD) 28.807

Total depreciation/year 2.325

Operating costs 1st year 2nd year 3rd year 9th year 10th year

Item Quantity t/Y Unit cost Cost/USD Cost/USD Cost/USD Cost/USD Cost/USD Electricity for plant operation lump sum 330,00 330,00 330,00 330,00 330,00 330,00 Labor (costs/month) 1 120 1.440 1.440 1.440 1.440 1.440 Spares & consumable lump sum 150 150 150 150 150 Operations and Maintenance lump sum 500 500 500 500 500

Total operating costs 2.420 2.420 2.420 2.420 2.420

Working capital 807

Total annual costs (including fixed costs) 5.552 4.745 4.745 4.745 4.745

Total capital costs 10.453 9.547 8.642

9

Financial Analysis

Item 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year Investment costs 2.325 2.325 2.325 2.325 2.325 2.325 2.325 2.325 2.325 2.325 Operating costs 2.420 2.420 2.420 2.420 2.420 2.420 2.420 2.420 2.420 2.420 Capital costs 10.453 9.547 8.642 7.737 6.831 5.926 5.021 Total costs 15.198 14.292 13.387 12.482 11.576 10.671 9.766 4.745 4.745 4.745 Total revenues 6.168 6.168 6.168 6.168 6.168 6.168 6.168 6.168 6.168 6.168 Gross profit -9.030 -8.124 -7.219 -6.314 -5.408 -4.503 -3.598 1.423 1.423 1.423 Corporate taxes (12.5%) 178 178 178 Net profit after taxes -9.030 -8.124 -7.219 -6.314 -5.408 -4.503 -3.598 1.245 1.245 1.245 Annual cash flow -6.705 -5.799 -4.894 -3.989 -3.083 -2.178 -1.273 3.570 3.570 3.570 Discounted Annual Cash Flow -4.754 -3.288 -2.197 -1.392 -806 -386 887 727 596

10

Annex 5 - Financial analysis: Gasifier– Case study in the Asueyi community Item 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year

Investment costs 31.600 31.600 31.600 31.600 31.600 31.600 31.600 31.600 31.600 31.600Operating costs 28.669 28.669 28.669 28.669 28.669 28.669 28.669 28.669 28.669 28.669Capital costs 123.371 112.686 102.000 91.314 80.629 69.943 59.257 Total costs 183.640 172.955 162.269 151.583 140.898 130.212 119.526 60.269 60.269 60.269Total revenues 202.859 202.859 202.859 202.859 202.859 202.859 202.859 202.859 202.859 202.859Gross profit 19.219 29.904 40.590 51.276 61.961 72.647 83.333 142.590 142.590 142.590Corporate taxes (12.5%) 2.402 3.738 5.074 6.409 7.745 9.081 10.417 17.824 17.824 17.824Net profit after taxes 16.816 26.166 35.516 44.866 54.216 63.566 72.916 124.766 124.766 124.766Annual cash flow from gasifier 48.416 57.766 67.116 76.466 85.816 95.166 104.516 156.366 156.366 156.366Discounted annual cash flow (22%) 47.349 45.093 42.110 38.737 35.211 31.697 38.871 31.861 21.406IRR 21% Pay back period 5

Sensitivity Analysis: Hp 1: The total amount of heat generated (equal to 12000 lt/diesel year) is sold at 15 USD/t

Item 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year Investment costs 31.600 31.600 31.600 31.600 31.600 31.600 31.600 31.600 31.600 31.600 Capital costs 123.371 112.686 102.000 91.314 80.629 69.943 59.257 Operating costs 28.669 28.669 28.669 28.669 28.669 28.669 28.669 28.669 28.669 28.669 Total costs 183.640 172.955 162.269 151.583 140.898 130.212 119.526 60.269 60.269 60.269 Total revenues 168.336 168.366 168.366 168.366 168.366 168.366 168.366 168.366 168.366 168.366 Gross profit -15.304 -4.589 6.097 16.783 27.468 38.154 48.840 108.097 108.097 108.097 Corporate taxes (12.5%) 762 2.098 3.434 4.769 6.105 13.512 13.512 13.512 Net profit after taxes -15.304 -4.589 5.335 14.685 24.035 33.385 42.735 94.585 94.585 94.585 Annual cash flow 16.296 27.011 36.935 46.285 55.635 64.985 74.335 126.185 126.185 126.185 Discounted annual cash flow (22%) 22.140 24.815 25.489 25.114 19.708 22.544 31.368 25.712 21.075 IRR 11% Payback period (years) 7

11

Hp 2: Reduction in the working hours (from 22h/d to 18h/d) 1st year 2nd year 3rd year 4th year 5th year 6th year 7th year 8th year 9th year 10th year

Investment costs 31 600 31 600 31 600 31 600 31 600 31 600 31 600 31 600 31 600 31 600

Capital costs 123 371 112 686 102 000 91 314 80 629 69 943 59 257 Operating costs 28 669 28 669 28 669 28 669 28 669 28 669 28 669 28 669 28 669 28 669

Total costs 183 640 172 955 162 269 151 583 140 898 130 212119 526 60 269 60 269 60 269

Total revenues 162 287 162 287 162 287 162 287 162 287 162 287162 287 162 287 162 287 162 287

Gross Profit -21 353 -10 668 18 10 704 21 390 32 075 42 761 102 018 102 018 102 018 Corporate Taxes (12.5%) 2 1 338 2 674 4 009 5 345 12 752 12 752 12 752 Net Profit after taxes -21 353 -10 668 16 9 366 18 716 28 066 37 416 89 266 89 266 89 266 Annual Cash flow 10 247 20 932 31 616 40 966 50 316 59 666 69 016 120 866 120 866 120 866 Discounted annual cash flow (22%) 17 444 21 956 23 707 24 265 19 982 23 113 33 731 28 110 23 425 IRR 10% Payback period (years) 8