Buchanan Renewables Fuel Inc.
On December 28, 2010 MIGA issued guarantees totaling $142.2 million to Vattenfall AB of Sweden covering its investment in Buchanan Renewables Fuel Incorporated in Liberia. The guarantees are for a period of 15 years and provide 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 Vattenfall’s power plants in Europe. Vattenfall’s investment will result in an expansion of the current operation from 500,000 tons of biomass per annum to two million tons.
Vattenfall’s investment 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.
Vattenfall’s investment will help develop a sustainable biomass source from unproductive trees (an agricultural waste product), as well as helping Liberia 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 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.