Brazil has signed two agreements to invest $6 billion in biofuel exploration in Mozambique, according to O Pais newspaper.
A proportion of the biofuels, which will be produced from sugar cane, will be exported to Brazil to cut its dependence on petroleum-based fuels.
Around $256 million has been invested in the Mozambique biofuels sector to date, which currently covers a cultivation area of 83,000 hectares.
Africa is increasingly becoming attractive to investors in alternative energy sources, especially biofuels.
Several European and US companies, as well as Asian countries, have been investing in Ghana to cultivate sugar cane and jatropha, the non-food crop for the production of biofuels.
Producing ethanol from sugar cane to convert in biofuels could potentially be of great benefit to the producers of sugar cane in Mozambique, as it would give them a larger market for their produce.
The Mozambique governmentÔÇÖs Investment Promotion Centre (CPI), is currently meeting Brazilian and South African business people in Maputo to discuss investment opportunities for producing biofuels from the countryÔÇÖs sugar cane resources.
The CPI has organised the meeting in partnership with the Brazilian member companies of APLA, an institution to promote interaction between the various bodies involved in biofuel production from sugar cane.
MozambiqueÔÇÖs agreement with Brazil is the latest in a series between African countries and the Latin American nation.
It is widely acknowledged that Brazil is a global leader in the cultivation of sugar cane for the production of ethanol and the conversion technology.
In the 1970s Brazil was forced to find alternatives to oil for economic reasons. It therefore has extensive experience and is now exporting its solutions to countries with similar weather and soil conditions.
Following the war of destabilisation in 1992, the Mozambican government implemented a programme to restructure the sugar sector, which had been seriously damaged by the conflict.
Part of the initiative was to attract investment from international companies, who invested about $16 million during the 1990s to recover sugar cane fields and sugar mills in Marromeu and Mafambisse in Sofala province, and Maragra and Xinavane in Maputo province.
The country went from a production of about 30,000 tonnes in 1998 to over 250,000 tonnes today.
It is now planning on doubling sugar production to around 500,000 tonnes per year.
Mozambique has signed an agreement with China for duty-free export of Mozambican products to the Asian country with no quotas. The deal could prove an attraction to biofuel investors keen to gain access to the Chinese market.
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