Biofuels Investments in Tanzania

Abstract

After substantial global investments into biofuel production from 2005 to 2008, challenges to a sustainable and robust biofuel industry have become more apparent than many proponents have anticipated. Across country and development contexts, conflicts arose as plans to scale up production clashed with local preferences or national policies, and Southern Africa has been no exception. This article analyzes recent difficulties with biofuels projects in Tanzania before the background of the more successful experiences of Brazil and South Africa. We identify areas of incompatibility between local expectations, government policy, and investor incentives. An assessment of different biofuels business models shows that some—such as contract farming—may not be appropriate for Tanzania’s situation and that policies are necessary that can address the needs of both local and regional stakeholders and provide adequate incentives for investors to pursue sustainable biofuels production.