In what is one of the biggest foreign investments in Cuba this year, Havana Energy Ltd. announced the Cuban government approved a joint venture to build a biomass plant for at least $45 million at a sugar mill in Ciego de Ávila province.
If successful, the 30-megawatt power plant at the Ciro Redondo sugar mill could spawn four more power plants located at sugar mills throughout the island, the British company said in a press release. Havana Energy’s announcement — at the International Havana Fair — came a day after a Brazilian company signed a 13-year agreement to manage a sugar mill in Cienfuegos and is part of a larger effort to revive the island’s sugar industry.
Havana Energy, a subsidiary of Esencia Group, formed the joint venture with Zerus SA, which belongs to state holding Azcuba.
Cuba today has a low percentage of its energy needs supplied by renewable energy sources, the largest part of it from cane bagasse, a byproduct of sugar production. To reduce dependency on expensive oil imports, the Cuban government is committed to increasing this figure substantially. The Azcuba group and the National Electricity Board have a strategy to increase power generation in sugar mills to decentralize the grid and provide electricity in areas with weak supply.
The joint venture hopes that power generation at Ciro Redondo will begin by 2015. The power plant will be fueled partly with bagasse waste from the sugar mill during the harvest season, and with marabú — an invasive weed that covers large areas of the country — for the rest of the year.
Havana Energy Chairman Brian Wilson, a former UK energy minister, said that the project had been three years in the making.
“Generating low carbon energy, saving on diesel, producing more sugar, clearing marabu from fertile land, employing people … [this project] provides multiple value,” Havana Energy CEO Andrew Macdonald said.
The bigger prize for Macdonald and Esencia is the development of a golf resort near Varadero. Negotiations with the Cuban government were completed in summer 2011, but Cuba has yet to give green light for that project.