InfraCo Asia Development Ltd. (InfraCo Asia), has signed a Joint Investment and Development Agreement (JDA) with Biomass Group Ltd. (Biomass Group) for investment in Biomass Ventures Ltd. (Biomass Ventures) to develop a first-of-its-kind, agri-energy infrastructure project in Sri Lanka.
The project will help align the country’s agricultural and industrial sectors by producing wood chips and pellets from the Gliricidia sepium trees.
This project will provide a new stream of income to smallholder farmers and a fresh source of clean energy.
The investment will support the development of a biomass supply chain and pellet plants in Sri Lanka. On the supply chain side, the scope of the agreement includes supporting the development of the PLanT (Produce, Logistics & Tracebility) IT platform. The platform will help track the production of the more than 100,000 smallholder farmers targeted to grow and harvest material from Gliricidia trees and streamline smallholder farmers’ production of raw material. It will also track Gliricidia growth and concentration and other cash crops, as well as enable efficient harvesting, collection, and transportation to the processing plants.
The Technical Assistance Facility (TAF), a sister company of InfraCo Asia and also part of the Private Infrastructure Development Group (PIDG), has provided an additional grant to support the monetisation of carbon credits being generated through the sequestering of carbon in the Gliricidia trees. The project will be registered for forestry carbon credits and net proceeds will go directly into development activities for surrounding communities.
InfraCo Asia CEO Allard Nooy, said, “InfraCo Asia is proud to be working with a partner who is committed to leveraging and enhancing synergies between the agricultural and industrial sectors. Biomass Group adeptly balances the need for commercial viability while providing smallholder farmers with a new income stream. The result is a product that has the potential to help millions of people have better access to clean energy.”
Biomass Group Ltd. Director Lucky Dissanayake said, “Biomass Group will have a transformative impact on Sri Lanka’s energy and agriculture landscape. At the same time, we aim to provide economic empowerment to the smallholder farmers registered to supply. In some cases, we expect farmers to double their per capita income by participating in the program.”
The Gliricidia Tree and Sri Lanka’s Biomass potential
As a fast-growing, high-calorific-value tree, Gliricidia provides a number of benefits to farmers’ existing operations. It is a nitrogen-fixing plant that improves soil health which can also lead to higher yields in other crops grown on-farm. The leaves are rich in proteins, and can be used as animal fodder and organic fertiliser, and can be made into pesticides and fungicides. Intercropping Gliricidia with existing cash crops will introduce a new, viable income stream to cultivators, without the requirement of additional land. Stakeholders can also save money by reducing chemical inputs.
The Bio-Energy Association of Sri Lanka estimates that 54 million tonnes of biomass can be produced in Sri Lanka per annum. This can translate to up to 4,000MW that could be produced from dendro sources in Sri Lanka. InfraCo Asia Development Ltd. (InfraCo Asia) is a commercially managed infrastructure development and investment company of the Private Infrastructure Development Group (PIDG).
Headquartered in Singapore, it aims to stimulate greater private sector investment in infrastructure in South and South East Asia. InfraCo Asia funds high-risk infrastructure development activities by taking an equity stake with a focus on socially responsible and commercially viable infrastructure projects that contribute to economic growth, social development and poverty reduction. At the appropriate time, either as close as possible to financial close and/or commercial operation, InfraCo Asia aims to (partially or fully, as appropriate) exit each project. It does this through the sale of its stake to the private sector in order to catalyse private sector investment and participation into the projects and countries it is involved in.
InfraCo Asia is currently funded by three members of PIDG – the Australian Department of Foreign Affairs and Trade (DFAT), the Swiss State Secretariat for Economic Affairs (SECO) and the UK Department for International Development (UKAid).
Biomass Group is a vertically integrated renewable energy company that develops biomass resources to produce chips, pellets and power. As an agri-energy program that combines food, fuel, and livelihood development, the organisation relies on an innovative partnership model to source supplies from smallholder farmers and plantation owners.
Once at full operational capacity, Biomass Group has the potential to generate millions of tonnes of commercial biomass. It aims to have transformative impact on the livelihoods in rural communities in Sri Lanka, and deliver on the United Nations Sustainable Development Goals.