Buchanan Renewables Fuel Inc.
This summary covers a shareholder loan from Buchanan Renewables B.V.of the Netherlands to Buchanan Renewables Fuel Incorporated in Liberia. Buchanan has applied for MIGA guarantees totaling $26.1 million to cover their shareholder loans to the project. The guarantees will have a term of up to fifteen years providing coverage against the risks of expropriation and war and civil disturbance.
Buchanan Renewables Fuel Inc. (BRF) is a Liberian biomass cultivator that collects and processes non-productive rubber trees for export to power plants in Europe. On December 28, 2010, MIGA issued guarantees to Vattenfall AB covering its equity investment in and shareholder loan to the same project. Buchanan Renewables B.V., another investor, has now requested coverage for its shareholder loans to the project.
The project is a Category B under MIGA’s environmental review procedures. Click here to view the Environmental and Social Review Summary (ESRS). Please note that this is the same ESRS that was disclosed for Vattenfall’s investment as the environmental and social impacts for the project have not changed since MIGA’s initial due diligence.
The investments will bring experience and technology to Liberia’s most important industry. The rubber industry employs over 40,000 Liberians directly, plus an additional 5,000 in related industries. Rubber sales currently constitute 90 percent of the country’s export revenues. As a labor-intensive industry in which Liberia has proven its global competitiveness, rubber is Liberia’s best available option for generating wide-scale sustainable employment and poverty alleviation.
The project will help develop a sustainable biomass source from unproductive trees (an agricultural waste product), as well as help Liberia to rehabilitate its rubber industry. Even though rubber plantations continued to operate during the war, there was limited replanting and the inventory is old. An estimated 60-75 percent of rubber trees have been slaughter-tapped and/or left to ruin during 15 years of civil conflict. This backlog amounts to nearly 60 million tons of biomass that can be harvested and exported. This project will help farmers by removing unproductive trees that provide no income and accelerate the farm-rejuvenation cycle. It also turns a liability into an asset for the farmers because they are compensated for the biomass.
MIGA’s proposed guarantee is aligned with the World Bank Group’s strategy of improving Liberia’s agriculture and natural resources management in ways that generate pro-poor growth. It is also aligned with MIGA’s commitment to supporting investments in the world’s poorest countries as well as countries affected by conflict.