Arab Finance: Egypt is advancing plans for a $278 million project to produce second-generation bioethanol from sugarcane bagasse, as Minister of Supply and Internal Trade Sherif Farouk reviewed the project's progress with representatives of Proger and Drexel, as per a statement.

The project aims to convert bagasse, a byproduct of sugarcane processing, into second-generation bioethanol, creating additional economic value from sugar industry waste while reducing its environmental impact and carbon emissions.

Farouk said the project aligns with the state's efforts to make greater use of resources, assets, and raw materials available at companies affiliated with the Ministry of Supply and Internal Trade, while converting agricultural and food industry waste into economically valuable products.

The project builds on a cooperation protocol signed with Proger Egypt on May 23, 2023. Since then, bagasse samples have been sent for technical testing to assess their suitability for bioethanol production, while a preliminary feasibility study has been prepared and is being updated ahead of the final feasibility study.

The Sugar and Integrated Industries Company is set to provide the land and raw materials required for the project. The company has also started preparing the necessary infrastructure, including natural gas connections and modifications to steam boiler burners.

Plans for the project also include a 10-year offtake agreement between Proger Egypt and Ecofuel, an Eni subsidiary, covering the purchase of the project's ethanol production, with the possibility of increasing volumes. The agreement is intended to provide a long-term marketing channel for the planned output.

The parties are also considering establishing a joint entity involving the Sugar and Integrated Industries Company, Proger Egypt, and Drexel to move the project toward implementation. The proposed entity would complete the final feasibility study and engage with investors as the partners work to finalize the investment structure and raise the required capital.

Legal procedures related to the proposed partnership structure and the establishment of the new entity are currently under review in coordination with the Ministry of Supply and Internal Trade's legal advisor.

Farouk called for accelerating the project's technical, financial, and legal studies and preparing an implementation plan covering timelines, funding sources, and the partnership structure to move the project from the preparation stage to execution.

Drexel Project Manager Sherif Mohamed Ibrahim said the project would use fermentation to convert bagasse into second-generation bioethanol, providing a use for sugar industry waste while reducing carbon emissions.

The project's output is targeted for export to the European market, according to Ibrahim. He added that the planned partnership would bring together the capabilities of the state-owned Sugar and Integrated Industries Company and the private-sector companies involved in implementing the project.