KHARTOUM - Sudan has secured funding for a new 140,000 tonne sugar factory which will also produce 30 million litres of ethanol by November 2014, in the latest step to gear the African nation's sugar industry towards export.

Executive Director of the Mashkour sugar company Mohamed Abdelatti Abdalla told Reuters the factory will be a model in the White Nile region to produce sugar, ethanol and electricity in the first phase, moving to add animal feed, dairy and meat in a second phase after five years.

"We've got a government-government credit line from EXIM Bank in India for about $150 million," Abdalla said. "The total cost of the project is $280 million and the balance of the money will be provided by the shareholders."

He said they would likely sign a contract to begin construction by the end of the month.

The shareholders in Mashkour are Sudan's largest sugar company Kenana and various governmental bodies.

"Because the sugar industry has a very long period for construction and it needs huge investment, the private sector is often afraid to invest -- they need to hit and run," he said.

"The government here will just provide guarantees to ensure the project is on track and then they will pull out when the project is more mature and the private sector will come in to buy the shares."

He said the factory would produce an initial crop of 70,000 tonnes of sugar and 15 million litres of ethanol in November 2013 before full production kicked in the following year.

Abdalla said the first phase will bring in estimated revenues of $140 million a year and the second phase adding the animal feed, meat and dairy production would bring it to $200 million with internal revenue return projected to be 28 percent.

The project is one of at least 10 planned to catapult Sudan into the world's top five sugar producers by 2020 hoping to target 10-14 million tonnes a year.

The plan is on track to transform Sudan from a sugar importer -- it produces about 750,000 tonnes a year while demand is 1.2 million tonnes -- into a net exporter by 2014.

But the overall plan will require some $20 billion investment, which may be difficult to secure in Sudan, emerging from multiple civil wars and suffering under U.S. economic sanctions since 1997 which has deterred Western investors.

Britain this year announced a new policy to encourage investment in Africa's largest country which has an abundance of land and where the Blue and White Niles meet. Khartoum hopes other European companies will follow suit.

source: reuters

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