Deal #1895

Location #1

Spatial accuracy level
Exact location
Location
Bagamoyo, Tanzania

Latitude
-6.24977480778368
Longitude
38.76779170800785
Target country
Tanzania
Comment on location
Pwani, Bagamoyo, Razaba Ranch The area is located along the Bagamoyo-Msata road about 20 km west of Bagamoyo and 80 km north from Dar es Salaam. The majority of the land under concession is located to the west of the Makarunge-Saadani Road.

Land area

Intended size (in ha)
28000.0
Size under contract (leased or purchased area, in ha)
[2009] 22000
[2011] 22300
Size in operation (production, in ha)
[2008] 200
Comment on land area
The actual size under contract is under much discussion (see Locher and Sulle for details). The company website states that approximately 20 000ha was granted by the government, with the local community granting an additional 2300ha. Under Sekab, the intended size was 250 000ha, however under EcoEnergy Africa the intended size is 28000ha. IFAD states estate is 11000ha, while EIA report suggests estate is 7500ha. Another source states that the estate is 21 255ha and 2,000 ha of land in an adjacent village. Another report states 20,400ha with 8000ha for irrigated sugarcane.

Intention of investment

Intention of investment
Biofuels, Food crops, Timber plantation (for wood and fibre), Renewable Energy, Other (please specify)
Comment on intention of investment
Approximately 8000 ha of land will initially be used for sugar cane plantation at the farm estate, while 3,000 – 4,000 ha of outgrowers will be developed over a six year time period, outside the core estate. Within the Razaba land area about 3,000 ha of marginal land needs to be improved and treated through planting banagrass and/or sweet sorghum so as to reduce the salinity and transform it into arable agricultural land. There is a land in the southwest area of the Razaba farm which is unsuitable arable agriculture but which has relatively good access to good infrastructure. This area of approximately 1,600ha is intended to be developed for commercial sustainable forestry. The project has taken an initiative to portion about 2000 ha of project land with access to two dams to be utilized for some years by the local pastoralists. Other areas of the project land will be used for bio-diversity, roads, water canals and other infrastructures.

Nature of the deal

Nature of the deal
Lease
Comment on nature of the deal
The original contract signed by the government for the approx 20 000ha was signed in 2008 (Formerly under Sekab). In May 2013 the land title with a 99 year land lease was officially issued (it is not clear whether the land lease runs for 99 years from 2008 or 2013).

Negotiation status

Negotiation status
[2009] Concluded (Contract signed)
[2016] Failed (Contract cancelled)
Comment on negotiation status
Agro EcoEnergy (Sekab) signed a Memorandum of Understanding (MoU) with the government of Tanzania reflecting a mutual interest in developing the first state of the art sugar cane industrial project in 2006. In April 2008 the Western part of the former RAZABA Cattle Ranch (20,000 ha approximately) was officially offered to Agro EcoEnergy. In June, 2008 the village assembly of Fukayosi unanimously agreed to provide 2,300 ha of land adjacent to the Razaba farm. Due to the project delay, this agreement was unanimously renewed by the village assembly in mid-2011. Sekab withdrew and sold the investment to EcoEnergy in 2009. In November 2011 the former RAZABA land was officially published as project land. Land title transferred in 2013. Government cancelled title to land in November 2016 and registered the land in the name of the President. As a result the company has started with international arbitration against the government for losses and compensation due to the company. The arbitration will be administered by the International Centre for Settlement of Investment Disputes (ICSID).

Implementation status

Implementation status
[2008] Startup phase (no production)
Comment on implementation status
Demonstration farm of 200ha with drip irrigation has been operational since 2008 generating good yields and sucrose levels.Two nurseries were also opened to supply the seeds for the plantations. Sekab withdrew and sold the investment to EcoEnergy, run by same people. One report states that the company has been unable to advance the project and the lands have not yet been put into production.

Leasing fees

Annual leasing fee
0
Comment on leasing fees
No lease fee-- instead in January 2012 an agreement was reached with the government where the Government and Communities would gain up to 25% ownership of the project company in exchange for land free of encumbrance. This information from one informal source (research report).

Contract farming

Contract farming
Yes
On leased / purchased area
Yes
On leased / purchased area (in ha)
3000
Not on leased / purchased area (out-grower)
Yes
Not on leased / purchased area (out-grower, in ha)
200
Not on leased / purchased farmers (out-grower)
21
Comment on contract farming
Outgrowers both on the lease and off the lease. Approximately 8000 ha of land will initially be used for sugar cane plantation at the farm estate, while 3,000 – 4,000 ha of outgrowers will be developed over a six year time period, outside the core estate. The people will be empowered to set up, own and operate independent commercial outgrower companies, each company farming sugarcane on approximately 75-150 ha of land. Some 25-35 companies will be supported in the process to produce and supply 300,000T – 400,000T sugarcane per year to the Agro EcoEnergy Mill. The out growers are from Kiwangwa, Matipwili and Gama. The outgrowers will be provided with infrastructure, training and the in-farm development component (Each outgrower company will access funding through the development of a business plan for the development of their farm). Off-farm outgrowers have commenced with rice and sugarcane farming- association called CHUA in Kiwangwa Village. IFAD report contains more information on the outgrower scheme programme.

Contract #1

Duration of the agreement (in years)
99

Number of domestic jobs created

Jobs created (domestic)
Yes
Planned number of jobs (domestic)
2000
Comment on jobs created (domestic)
The project will have modernized agriculture and infrastructure engineering (including mechanical harvesting), thus it is not expected to create substantial employment (besides the outgrower program). Another report states 2300 planned employment.

Operating company

Name of investment project
Razaba Farm
Comment on investment chain
The project was formerly owned by Sekab (EcoEnergy is a minority shareholder in Sekab) . The project company is registered as Bagamoyo EcoEnergy Limited (BEE)-- which is owned by Agro EcoEnergy Tanzania Ltd. The company has received financial backing from the African Development Bank, the International Fund for Agricultural Development and the Swedish International Development and Cooperation Agency.

 

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Data source #1

Data source type
Research Paper / Policy Report
File
Publication title
Chachage, "LAND ACQUISITION AND ACCUMULATION IN TANZANIA, THE CASE OF MOROGORO, IRINGA AND PWANI REGIONS"
Date
2011-01-01

Data source #2

Data source type
Media report
File
Publication title
Tanzania farmers accuse biofuel investors of land grab
Date
2013-07-18

Data source #3

Data source type
Research Paper / Policy Report
File
Publication title
Stefania Bracco -- Effectiveness of EU biofuels sustainability criteria in the context of land acquisitions in Africa, Journal of Renewable and Sustainable Energy, 05/2015

Data source #4

Data source type
Research Paper / Policy Report
File
Publication title
Environmental and Social Impact Statement of the Proposed BioEthanol Production from Sugar Cane on the former Razaba Ranch, Bagamoyo District,Tanzania, July 2008, ORGUT Consultants and Ardhi University

Data source #5

Data source type
Media report
File
Publication title
EcoEnergy threatens court action over sugar project after ‘unlawful’ expropriation

Data source #6

Data source type
Media report
File
Publication title
Bagamoyo Ecoenergy takes govt arbitration
Date
2017-09-11

Data source #7

Data source type
Research Paper / Policy Report
File
Publication title
Brigitte Chung, Y. (2017), Engendering the New Enclosures: Development, Involuntary Resettlement and the Struggles for Social Reproduction in Coastal Tanzania. Development and Change, 48: 98–120. doi:10.1111/dech.12288
Date
2017-01-10

Data source #8

Data source type
Research Paper / Policy Report
File
Publication title
New Alliance, New Risk of Land Grabs, Action Aid, May 2015

Data source #9

Data source type
Media report
File
Publication title
NGO accuses EU company of illegal African land grabs
Date
2015-03-23

Data source #10

Data source type
Research Paper / Policy Report
File
Publication title
Bioenergy Environmental Impact Analysis (BIAS) of Ethanol Production from Sugar Cane in Tanzania Case Study: SEKAB/Bagamoyo, FAO Environment and natural resources management, working paper 47, 2010

Data source #11

Data source type
Research Paper / Policy Report
File
Publication title
Biofuel, land and environmental issues – the case of SEKAB’s biofuel plans in Tanzania, Nordic Africa Institute, the University of Agder, Norway and Sokoine University of Agricultural Sciences, Tanzania, March 2011

Data source #12

Data source type
Research Paper / Policy Report
File
Publication title
Bagamoyo Sugar Infrastructure and Sustainable Community Development Programme (BASIC). Final project design report.
Date
2015-08-06

Data source #13

Data source type
Media report
File
Publication title
Development today- Biofuel and aid: sharp fronts over land as plantations expand in Africa
Date
2009-12-02

Data source #14

Data source type
Media report
File
Publication title
Tanzania waits for sweet salvation
Date
2015-11-25

Data source #15

Data source type
Research Paper / Policy Report
File
Publication title
EXECUTIVE SUMMARY OF THE ENVIRONMENTAL AND SOCIAL ASSESSMENT

Data source #16

Data source type
Research Paper / Policy Report
File
Publication title
ENVIRONMENTAL AND SOCIAL MANAGEMENT FRAMEWORK SUMMARY

Data source #17

Data source type
Company sources
File
Comment on data source
http://www.ecoenergy.co.tz/faq/project-faq/ Link no longer working

Data source #18

Data source type
Research Paper / Policy Report
File
Publication title
Center for Human Rights and Global Justice, Foreign Land Deals and Human Rights: Case Studies on Agricultural and Biofuel Investment (New York: NYU School of Law, 2010).

Data source #19

Data source type
Company sources
File

Data source #20

Data source type
Research Paper / Policy Report
File
Publication title
Foreign investment in Tanzania by Locher and Sulle (LDPI working paper 31)

Data source #21

Data source type
Research Paper / Policy Report
File
Publication title
Grain The farmland grab in 2016: how big?how bad? June 2016

Data source #22

Data source type
Media report
File
Publication title
IISD Blog- "Farmland Investments Are Finding their Way to International Arbitration"
Date
2017-09-20

Consultation of local community

Community consultation
Limited consultation
Comment on consultation of local community
Consultations were held, however key information was withheld during the consultations. "ActionAid’s research finds that many of them have not been offered the choice of whether to be resettled or not".

Displacement of people

Displacement of people
Yes
Number of people actually displaced
1429
Comment on displacement of people
Razaba is still currently home to an estimated 600 families. Another source states 1300 people.

Negative impacts for local communities

Negative impacts for local communities
Displacement

Promised or received compensation

Promised compensation (e.g. for damages or resettlements)
Replacement house or cash. In January 2012 an agreement was reached with the government where the Government and Communities would gain up to 25% ownership of the project company in exchange for land free of encumbrance. Communities were due to receive cash compensation or be relocated to nearby farmland. Agro EcoEnergy has budgeted around $4m-$5m for compensation payouts and relocation costs but has yet to announce details of where farmers will be moved.

Promised benefits for local communities

Promised benefits for local communities
Health
Education
Capacity Building
Comment on promised benefits for local communities
The project has taken an initiative to portion about 2000 ha of project land with access to two dams to be utilized for some years by the local pastoralists. This will facilitate their preparedness for sustainable living and grazing after being resettled. The pastoralists will for some years be trained in sustainable grazing, pastoralism and provided basic education in reading and writing to improve their livelihood. "EcoEnergy claims that the project will bring many benefits for the local community."

Former land owner (not by constitution)

Former land owner
State
Community
Comment on former land owner
Was used as a cattle ranch from 1974 to 1994 (about 20000ha). The additional 2300ha was used by the community.

Former land use

Former land use
Commercial (large-scale) agriculture
Smallholder agriculture

Former land cover

Former land cover
Cropland
Forest land
Shrub land/Grassland (Rangeland)
Marginal land

Detailed crop, animal and mineral information

Crops area
Sorghum, Sugar Cane, Trees (unspecified)

Use of produce

Has domestic use
Yes
Domestic use
100
Comment on use of produce
Sorghum initially for land improvement, will also plant sugarcane in this area in future. Another report states that sugarcane may be exported.

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
ETH (Ethanol production);SUP (Sugar production);ELE (Electricity production). The processing plant for bio-ethanol will be located approximately 6°19'30"S 38°46'11"E, at the former Razaba Ranch near Bagamoyo, approx. 80 km northwest of Dar es Salaam.

Water extraction envisaged

Water extraction envisaged
Yes
Comment on water extraction envisaged
Water rights were allocated to the company in 2013 (30 year water permit to sustain 12,000ha). Irrigation technologies such as sub surface drip, centre pivot and semi solid sprinkler types. Drain water from the farm is directed into ponds (natural and/or management) and the water recycled back to irrigation ponds. Water permit number WA 0169.

Source of water extraction

Source of water extraction
Surface water (River)
Comment on source of water extraction
Wami River. it is asserted that SEKAB BT removed a finding that showed that the amount of irrigation required on the project’s sugarcane plantations would be “high and sometimes exceed available water” from the Wami River—even as nearby residents and ecosystems rely on the same water source.

How much water is extracted?

Water extraction amount
160000000
Comment on how much water is extracted
The daily maximum water requirement for the 850 ha pilot plot is estimated at 0.59 m3/s, increasing to 11.8m3/s when the project is operating at full capacity. Estimated 160 million m3/year required for 21000hectares.

Overall comment

Overall comment
Sekab withdrew and sold the investment to EcoEnergy in 2009. Spent more than USD 53 million on the project over the past ten years.

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