Presented as part of the seminar: South at the Steering Wheel - Improving sustainability in land investment for bioenergy in sub-Saharan Africa 29th May 2012, 08:00 - 17:30 Naturvårdsverket (Swedish EPA), Stockholm, Sweden Speaker: Jörgen Sandström, Addax Bioenergy Regarding the development of Sugar cane to ethanol, comprising a sugarcane plantation, ethanol distillery and power plant, Jörgen Sandström has earlier mentioned proper planning of the social and agricultural development, including detailed charting of land and responsible land leasing, local training of the local community, initiating local food production, and to directly and indirectly support investment related operations. Compliance with social and environmental standards such as AfDB’s Environmental and Social Safeguard policies, the World Bank’s International Finance Corporation (IFC) Performance Standards is recommended.

1. Makeni Ethanol and Power Project
Sierra Leone
South at the Steering Wheel
SEI, SIANI, Stockholm, 28 May 2012
Jörgen Sandström

2. About Addax Bioenergy
Addax Bioenergy
Developing a Greenfield renewable energy and agriculture project at Makeni, Sierra Leone
Produce bio-ethanol for export and domestic use, and green electricity for the national grid.
FAO define the project as Integrated Food-Energy System (IFES) for People and Climate
Project aims to become a model for sustainable development, through the respect of strict
sustainability standards and the introduction of innovative social solutions.
Designed to comply with the following laws and standards:
• IFC Performance Standards
• AfDB Standards
• Equator Principles
• EU RED Directive
• Roundtable of Sustainable Biofuels and Bonsucro standards

3. Sierra Leone: facts and figures
Sierra Leone facts (FAO 2010):
People : 5 mio
Surface : 7.2 mio ha
Forest cover : 1 mio ha
Arable land : 5.3 mio ha
Cultivated land : 0.8 mio ha
Rainfall : ~3000 mm
2 mio ha = 2050 food security target
3.3 mio ha = available
Gently undulating estate lands in Bombali District
Aerial pictures from the project area
Sierra Leone land use

4. Project overview
Bumbuna dam
Makeni-Freetown highway
Rokel river
Power transmission line
Rokel river
Magbass plantation
Freetown (150km)
Bumbuna Dam
Rokel River
Project Area
Export Terminal

5. Project scope
The Makeni Project
Location near Makeni, Central Sierra Leone
Project features
Feedstock Sugarcane
Factory Ethanol and Power
Market EU export and national grid
Carbon credits CDM mechanism
Project capacity
Plantation size 10’000ha, irrigated, mechanized
Processing capacity 1 mio tons of cane p.a.
Ethanol output 85’000m3 p.a.
Excess power 15 MW
Workforce > 2000 (currently >1200)
GHG savings ~190’000 t CO2 p.a.
Investment EUR 267mio – project financed
Timing Construction 2009 - 2014
First production 2013
Proven integrated sugarcane ethanol and power industry model
for domestic and export markets

6. Participating DFI’s
Project developed in partnership with eight European and African Development Finance
Institutions (DFI’s):
Netherlands Sweden Germany
Belgium CanadaSouth Africa
United Kingdom
African Development Bank
African Renewables Deal of the
Year 2011 Award by PFI and
PFM (Reuters and Euromoney)
• Project fully funded by AOG and DFIs
• Financial Close on December 2011
• Loan tenor 12 years

7. Why sugarcane ethanol
0 10 20 30 40 50 60 70 80 90
US Corn
China Corn
US Beet
EU W heat/Beet
Brazil Cane
Australia Cane
Thailand Cane
Sierra Leone Cane
US Soybean
U S/E U W aste oil
EU R apeseed
U S cents per litre
Biodiesel
Sugar
B eet / W heat
Corn
PROVEN
MODEL
1. Sugarcane grows in most of sub-Saharan Africa 2. Best CO2 savings by far
4. Highest yield per hectare3. Lowest production cost

8. Best CO2 savings

9. Production cost

10. Industrial model
Bagasse
Crushing Juice Fuel ethanolEthanol distillationSugarcane
Electricity co-generation
Sierra Leone power grid
10,100 ha 950,000 tons sugarcane p.a. 83’000 M3 p.a.
32 MW377,000 tons p.a.
64’500 MWh p.a.
100’500 MWh p.a.
Integrated production process using all main and bi-products = Lowest production cost + Highest carbon savings
Sugar juice fermented and distilled to Ethanol
Sugarcane fibres (Bagasse) used as boiler fuel for Power Plant
Green cane harvesting: leaves left in field protect and enrich soil quality
Distillation residues (Vinasse) used as fertilizer

11. Power generation
First Independent Power Plant (IPP) in
Sierra Leone
20-year Power Purchase Agreement
signed with Government and ratified by
Parliament
100’000 MWh p.a. fed into national grid
Complements seasonal production
profile of Bumbuna dam
Production during cane season and into
off-crop season
Sugarcane fibres (bagasse) feedstock
2x80 ton 67 bar boilers; 32 MW turbine
Power plant built by Isgec John
Thompson
10km HV line built by Cegelec (Vinci
Group)
Addax power (red) helps level seasonality of Bumbuna hydro-dam (blue)
State of the art co-generation power plant

12. Field operations
Harrowing of cane field under pivot
Road construction Planting

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Field operations
River manifold
Booster pump house Storage dam
Pipe to booster pumps
Land Preparation Seedcane hauled from Block 16 to Block 7
Planting in Block 7 Recently planted cane in Block 7

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Cane fields under irrigation
Pivot in Block 16
Pivot in Block 7

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Factory lay-out
• Cane crushing mill
4800 tons per day
Isgec – John Thompson
• Fermentation and
Distillation
380’000 l Ethanol per day
Praj Industries
• Power Plant
32 MW capacity
Isgec-John Thompson
• Civil works
CSL Group
• EPCM construction
management by De Smet
• Cane crushing mill
4800 tons per day
Isgec – John Thompson
• Fermentation and
Distillation
380’000 l Ethanol per day
Praj Industries
• Power Plant
32 MW capacity
Isgec-John Thompson
• Civil works
CSL Group
• EPCM construction
management by De Smet

16. Factory works
Workshop foundations
Site campCement mixer
Boilers assembled in India
• Engineers mobilized
• Factory road cleared
• Civil works started
• Site camps established
• Admin and clinic built
• Foundation works
underway
• Distillery and Power
plant in Workshops
in India
• Commissionning Nov
2013

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Factory Site
Site campDistillery foundations
Foundation works
Fermentation tank foundations and workshop

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Factory Site
Site camp
Factory clinic
Factory office block
Residential houses
Water treatment plant

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Project philosophy, design and ambitions
Foundations
Addax principles and experience with community relations in Africa
Long-term win-win community inter-action
Commercial success is key but must be sustainable (economic, social, environmental)
EU RED sustainability criteria for biofuels
Avoid displacement
Protection of biodiverse areas
Carbon life-cycle analysis
IFC Performance Standards – project focus on
Food security
Land rights
Physical and economic displacement - resettlement
Nobody worse off than before
Law of Sierra Leone
SLEPA
Water Act
Land Act
Impacts: Avoid if you can, mitigate if you can’t

20. Land selection criteria
Impact assessment
Avoid physical resettlement
= villages, settlements
= buffer zones
Protect bio-diversity
= biodiversity no-go areas
= riparian forests; forested areas
= 75 m buffer from rivers
Minimize economic displacement
= subsistence farming - rice paddies
= areas of intense agric activity
= Firewood, Cattle grazing, Fishing
Agriculture criteria
= bulk water supplies (proximity to river)
= radius around factory
= topography, drainage
= soil type

21. Extensive use of GIS in land selection
Categories
Type 1: 0 people
Type 2: 8 people
Type 3: 13 people
Number of villages
Total villages in project
area: 68
Population
Total population in
project area: 13’600
Each field and structure counted, groundtruthed and mapped using Geographical
Information Systems (GIS)

22. GIS and ground assessment of people, infrastructure and land
Burnt land, river and village areas Fallow and permanent croplands
Infrastructure and grasslands Infrastructure and grasslands

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Extensive land use assessment
Final land use assessment
Savannah use: Grasslands 36% - Scrublands 32%
Cropland use: Permanent 2.3% - Fallow 9%
Village use: 0.1%

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Project environmental and social processes
Level Five
Opportunities – People in project area prioritised for job opportunities
Level Four
Mitigation through Social Environmental Management Programme (SEMP)
29 individual management plans (ESMPs) with FDP being the flagship programme
Level Three
Compensation through formal RAP Process
Level Two
Land Lease process including Acknowledgement Agreement targeting land owners
Coherent and transparent process - Lease of 5 USD per acre (abt 12 USD per hectare)
Level One
Formal Stakeholder Engagement Process including Grievance process
Environmental Social impact Assessment (ESHIA)
14 individual specialist studies

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Project key guidance
Management of Expectations
Local dynamics and complexities
Coherence
Transparency – Disclosure
Addax NOT alone in its project area

26. Innovative dual land acquisition process
Two documents cover land acquisition:
Land Lease and Acknowledge Agreement
Total Rent
US$ 5 per acre - (US$ 12 per hectare)
(US$ 3.60 from LL plus US$ 1.40 from AA)
Distribution of Land Lease monies
50% Landowner
20% Chiefdom Council
20% Districts,
10% GOSL
Acknowledge Agreement = US$1.4 directly paid
Land owners rent – Monies received
Total amount US$ 3.20 = 63% of total rent
(US$1.8 from Land Lease plus US$1.4 from AA)
Plus direct Compensation for lost crop
Formal compensation process
Land lease Acknowledgement Agreement

27. One year long bottom-up approach
Countless meetings organized with stakeholders
in project area since 2007
Public disclosure
All Land Lease and ESHIA documentation
Stakeholder consultation
The Paramount Chiefs
Section Chiefs
Village Heads
Landowners
Community Elders
Members of Parliament
Mayo and Councilors
NGOs
Ward development committee
Women's Cooperative
Women's Leaders and Youth Leaders
Regional Commander
Media
Stakeholder engagement during land acquisition process
Discussion on Land Use
Project presentation to District CouncilOne of many community meetings
Media coverage

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Village boundaries and compensation process
Great number of meetings and activities held in Sierra Leone over the last three years presenting project information, land lease
and documentation with special focus on land owners
Legal representation to Landowners by Franklyn Kargbo & Co
Addax started the compensation process in 2010
Landowners and their lawyers discussing land lease documentation Addax and landowners discussing project layout and demarcation of
village boundaries

29. Survey of village boundaries
First real GIS maps created First real GIS village maps created

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Village boundaries and compensation process
In over 60 villages;
- Village boundaries established,
- AAs' signed
- Compensation paid
Compensation process expected to
Be completed in 2012

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Signing of Acknowledgement Agreements
Signing ceremonies with participation of land owners, Chiefdom Council local authorities, NGO/CSOs, media

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Signing of Acknowledgement Agreements
Land owners receive fact packs, maps and checks

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Improvements with the Addax Land Lease process
Appointment of Legal Representation by Landowners
Extensive public legal consultations with Landowners
Lease negotiations between Addax and Landowner’s law firms
Public authorization given by Landowners to Chiefdom Council to
sign on their behalf
Acknowledgement Agreements directly signed with Landowners
(new invention)
Direct payments to Landowners; their share in the lease increased
to 64%
Survey of village boundaries for fair compensation to Landowners
Relinquishment of un-used lands within 5 years
Water Rights Agreement (first company to seek license)
Signing of Acknowledgement Agreements in Malal Mara
Chiefdom on 27 May 2011
Town hall meeting with landowner’s lawyer and Addax social
manager

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Innovative approach to livelihoods and food security
THE FARMER DEVELOPMENT PROGRAMME (FDP)
Ensure minimum impact on food crop production areas and that
large areas of land are available within the project area for
communities:
Aligned with Government and donor agricultural strategy
Developed in cooperation and building on FAO experience
Assisting smallholders towards becoming self-sufficient
Training > 2000 farmers during 30 week FFLS training courses
First 118 farmers graduated February 2011 (70% were women)
>2000 ha of lands to be prepared under the Addax FDP
Currently largest food production programme in Sierra Leone
Achievements to May 2012
1300 hectares planted
1600 tons of rice harvested
> 1400 farmers trained in better farming practices

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Female FDP graduates in majority
35

36. Fleet of FDP tractors and implements

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FDP lands established in the project area

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Employment
Currently over 1200
employees
In Operations > 2000
permanent employees
Local communities
prioritized for employment
Mandatory HSSE
monitoring and protective
equipment
Health care
On-the-job and classroom
training
Mechanics in Workshop
Electricians
Painters
Payday
38
Salaries paid to local
workers since April 2010 =
2.046 million US$

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Lessons learned Skills and Vocational Training
Farmer Field and Life Schools
(FAO curriculum) introduced
>1400 farmers trained in
better practices
On-the job and classroom
training for artisan employees
Literacy and Numeracy classes
for employees
Expat artisan train local
workers
Graduate Advancement
Programme - GAP
Rokel Technical Institute
(TVE school) project
Community skills projects:
Water and Sanitation, Fire and
Traffic safety, Forestry New training facility (classrooms and workshop)
Graduation ceremony
On-the-job training
Farmer school training site
39
Crop test plot

40. Female operators trained by Addax

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Employee and Community Health
Comprehensive Health Impact
Assessment in ESHIA process
2 Field Clinics and 2 Ambulances
serve workers, families and
communities in emergency
situations
Factory clinic under construction
Health Monitoring Plan
implemented
Water and Sanitation Project
Awareness Campaigns
Factory clinic foundations
Field clinic and ambulance
Awareness campaigns
Serving communities
41

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Other Community Benefits
New houses built with money from compensation / lease payments
42
Influx of Cash (land lease,
compensation, salaries)
and economic activity =
direct and indirect benefits for
the local communities
• Contracts awarded to local
contractors (April 10- March 12):
12.7 million US$
• Construction: New Houses and
Sanitation
• New haulage roads used as
access to market
• Families can afford to pay
schooling fees
• New services: Catering,
Bakeries, Mechanics etc
Field kitchen
New haulage roadSchool children

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Monitoring plan approved in 2011
Social and Environmental Monitoring Programme
consisting of 12 different parameters
Collection of baseline data
Environmental monitoring (Soil, Air, Water etc.)
Social monitoring (40 livelihood indicators
tracked
Health monitoring (diseases, hygiene)
Quantitative and Qualitative Data
Samsung Tablets to allow processing
Environmental & Social Monitoring is paramount

44. End of presentation
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