Last update:

Principle Capital Holdings Biofuel project in Dombe, Mozambique


In 2007, Principle, which is listed on the London stock exchange and backed by a group of hedge funds, began a project to develop a sugar-cane plantation on more than 20,000 ha in the Dombe District of central Mozambique. The project is overseen by Principle Energy Ltd, a group company of Principle Capital Holding, and will provide feedstock for what it says will be one of the worlds five largest ethanol plants and will produce the cheapest bio-fuel on the market. Principle Energy Ltd holds a 5-year contract with Principle Energy Management Services Limited, also a subsidiary of Principle Capital Holding. The contract was approved in 2008, construction was to start in 2010 and conclude by 2013, but by 2011 sugar cane production had not yet reached a level to warrant the start of construction. In September of 2013 the company's website listed the factory site as 'cleared and leveled'.

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Basic Data
Name of conflict:Principle Capital Holdings Biofuel project in Dombe, Mozambique
State or province:Manica province
Location of conflict:Dombe District
Accuracy of locationHIGH (Local level)
Source of Conflict
Type of conflict. 1st level:Biomass and Land Conflicts (Forests, Agriculture, Fisheries and Livestock Management)
Type of conflict. 2nd level:Land acquisition conflicts
Agro-fuels and biomass energy plants
Specific commodities:Ethanol
Project Details and Actors
Project details

The plant will produce 100 million liters of bioethanol annually, and was initially expected to create 2500 – 4000 jobs, but the company’s website currently cites 1600 at completion. The biofuel will be exported to Europe and North America via oil company Shell. According to the company’s website, as of 2013 only 1000 ha were cleared, 307 ha prepared for planting, and 136 ha actually planted. 17 km of the 126 km road was completed and the dam and irrigation network is 75% complete.

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Project area:23000
Level of Investment:290,000,000
Type of populationSemi-urban
Company names or state enterprises:Principle Energy Ltd (PEMS) - Group company of Principle Capital Holdings
Nicholas Trust from Australia
Jupiter S.O.M from Canada
Deutsche Bank from Germany
SVM Asset Management
Conflict & Mobilization
IntensityLATENT (no visible organising at the moment)
Reaction stageUnknown
Project StatusStopped
Conflict outcome / response:Withdrawal of company/investment
Project temporarily suspended
Project stalled
Do you consider this an environmental justice success? Was environmental justice served?:Not Sure
Briefly explain:The status of the project is unknown, but at last mention it was stalled due to financial issues.
Sources & Materials
Links to general newspaper articles, blogs or other websites

AgriIQ, 'Mozambique Sugar Cane Project'
[click to view]

Principle Energy, 'Projects Overview',
[click to view]

Biopact, 'Principle Capital raises $70 million for sugarcane ethanol plant in ‘biofuel superpower' Mozambique

[click to view]

Macauhub, 'Project to build ethanol factory in Mozambique at a standstill'
[click to view]

Meta information
Contributor:Aliza Tuttle
Last update24/06/2014
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