2X 10 kL BioDiesel Plant Project Project Description: To promote sustainable development and fossil oil reduction by producing BioDiesel from a nonproductive land in a selected province in Indonesia. This project consists of 3 components which can not be separated. 1. Minimum of 3,000 Hectares of Jatropha L. Curcas plantation project 2. 2 x 10 kL BioDiesel plants, and 3. Marketing the product and side-product Goal/ Purpose: Improving revenue of the province where the project is located. Producing final-energy alternative while shifting dependencies of fossil oil consumption. Reducing National final fuel consumption and reduce fuel-subsidies Reducing numbers of non-productive land through Jatropha plantation . Expected Results The project will support and complement GOI ( Ministry of Energy ) efforts to: Shifting the consumption of Fossil fuel to bio-fuel (renewable energy) Reducing national final-fuel subsidy and let the price of final energy goes through the economic price of oil Increase community awareness to reduce fossil fuel dependencies Increase the province revenue. Increase the knowledge and skills of community groups through the training that will be given Location South – East Sulawesi, East Nusa Tenggara and North Sulawesi. Sector Agriculture & Natural Resources /Agriculture Production, Trading & Industry, Energy, Private Sector Rationale 1. To reduce dependencies of fossil fuel, Indonesia must find out alternative energy as soon as possible. Alternative final-fuel must be found out. Producing bioDiesel is our main goal to answer the question. This objective in parallel will also reduce the oil subsidy that seems increasing drastically from year by year. 2. To increase revenue of selected province, means that selected province has to be able to use their non-productive land and innovate in agricultural production and marketing of alternative fuel in response to increase of fossil oil price. However, there are constrained from doing so because of a lack of appropriate technologies, level of investments in public goods, and access to information. While the Government is taking steps to fill the gaps in providing -1- public goods support for agriculture, and increasingly for non-rice crops, additional support is needed to target village-level public investments to the needs of farmers, to increase the access of farmers to information, and to increase the availability of technologies needed by farmers. Objectives and Scope The long-term development goal is reducing fossil-oil dependencies. Reducing national final - oil subsidies. Increased of agriculture production and marketing. The immediate objectives of the Project are (i) improved of province-level investments, (ii) increased access of farmers to information, and (iii) a reorientation of the focus of agriculture production. The Project will comprise 3 components to be implemented over 5 years: (i) farmer empowerment, (ii) Reducing national fossil-fuel dependencies, (iii) Increasing revenue by reducing oil subsidy and bioDiesel marketing, and (iv) project management. Current Status and Issues As fossil fuel price increases to USD 60 per Barrel, national subsidy jumps from Rp 40 Trillion ( 2003) to almost Rp 80,000,000,000,000 in 2005. With the current exchange USD 1 ~ Rp 9,500, means we spent USD 8.4 Billion just for fossil oil subsidies. 63% of subsidies went to final-fuel for transportation and Industrial sector. This condition must be cut-out. Subsidy must be reduce, energy saving must be disseminated and energy alternative shall be proposed. Based on the Blueprint of National Energy planning 2005 - 2025, BioDiesel plant must be developed and produced to replace Diesel fuel by 1% of consumption. The project must be started as soon as possible. This comprehensive project will be introduced to GOI with the scheme as follows; (i) Starting from land-use till Jatropha production to be funded by GOI through selected province. (ii) Engineering-Procurement-Construction-Commissioning (EPCC) of bioDiesel plant shall be funded by Donator country or 3rd party involvement (iii) Product off-taker can be long term contract with 3rd party or GOI or Donator country. Environment Category: B ( ADB stabdard ) Social Aspects and Remedies ; n.a. Benefits and Beneficiaries The Project will benefit to selected province in which more than 3 million people population and reduce towards overall (national) oil subsidy by 1% in 5 years totally. The components for farmer empowerment, development of bioDiesel national and local information resources, and support for agricultural innovation development and dissemination are expected to benefit these people by facilitating the project and marketing innovations, and finally increasing province incomes. The Project will target 3 provinces in which a large part of percent of the fuel subsidy goes to. Typical project beneficiaries will be farmers (province) who have low productive landholdings and nonproductive land belong to province authority. The province investments will directly raise the incomes or producing alternative fuel for their transportation/industrial final-energy consumption. -2- Public Consultation (in process) a. Arranged by Willy Widyanto Rekayasa Industri Malaysia Sdn Bhd Ph 60 12 479 7000 b. Date for Consultation : c. Groups Consulted : Beneficiary Participation in Formulation (in progress) Identified during project appraisal. Beneficiary Participation in Implementation (in Progress) Consulting Services A team of 10 consultants for a total input of 480 person-months of the following international and domestic consulting services will be required to prepare a detailed implementation plan and procedures for the Project during the first year, and support the subsequent 4-year implementation phase. Person-months are given in parentheses. The international experts (110) will be specialists in (i) project implementation (team leader) (36); (ii) Jatropha L Curcas expert (36); (iii) participatory planning (4); (iv) agricultural marketing (4); (v) economics/financial analysis (4); and (vi) project management (36). The domestic experts (220) will be specialists in (i) project implementation (98); (ii) liaison officer (48); (iii) participatory planning (36); (iv) national monitoring and evaluation (72); (v) Province monitoring and evaluation 2 person (96); (vi) economics/financial analysis (6); (vii) Marketing 1 person (12) An international consulting firm in association with domestic consultants will be selected. The quality and cost-based selection method will be used for engaging consultants. Province will be selected based on the more-advantage offer namely extensive experience in agriculture and other procurements will be proceed through competitive bidding based on eligibility and evaluation criteria established by the Project to supervise and coordinate with selected province or community organizations under subcontracts. Procurement Procurement under the Project will follow a normal Guideline for Procurement, while Contracts for EPCC-BioDiesel will be carried out using International competitive bidding procedures acceptable by Donator country. The Project will also be responsible for procurement of office furniture through local competitive bidding. Province / Local Communities shall provide labor and appropriate technologies. Materials and services for such civil works shall be procured through direct purchase. -3- Cost and Financing Plan (in US$ million) Source Foreign Cost Local Cost Total Bank 56.00 0.00 56.00 Cofinancing 0.00 0.00 0.00 Borrower 0.00 0.00 0.00 Beneficiaries 0.00 0.00 0.00 Others 0.00 0.00 0.00 Project/Program Cost 56.00 0.00 56.00 OCR ADF Total 0.00 56.00 56.00 Loan Amount Contact List REKAYASA Industri Malaysia Sdn Bhd: Willy Widyanto Project Team Leader Wisma UOA II - Jalan Pinang – Kuala Lumpur 50450 - MALAYSIA Ph: (603) 2161 7418 Fax ; (603) 2161 8418 Mobile: (6012) 479 7000 E-mail: willy.siswohardjono@gmail.com Executing Agency : Farnow Environmental Solutions Group Mr. Desmond Knipe Regional Manager - Indonesia Ariobimo Sentral Lt.4, Jl. H.R. Rasuna Said, 12950, Jakarta INDONESIA Mobile: +62 815 850 222 51 Email desmondknipe@mail.farnow.com.au Indonesian Partner : PT KONEBA (Energy Conservation Center of Indonesia) Mrs Magda Tumbol Finance Director Jl. Wolter Monginsidi No. 4&6 Kebayoran Baru, Jakarta Selatan DKI JAKARTA – 12160 Phone 021-7268881, 7268882 Fax 021-7268880 Remarks : -4-