INTERVIEW-Kenya's Mumias to make biofuels, boost power output

By Duncan Miriri

NAIROBI, July 10 (Reuters) - Kenya's biggest sugar miller Mumias MSCL.NR will begin producing biofuels and add 26 megawatts of electricity to the national grid from next year, its chief executive said on Thursday.

"The sugar business is energy business," Evans Kidero told Reuters. "Kenya is a net importer of sugar so the size of the market is not in dispute, but what would add value for millers are other by-products, ethanol and electricity."

Kidero said Mumias was counting on a new $360 million project on the Indian Ocean coast to annually produce about 23 million litres of ethanol which is distilled from molasses, a cane by-product.

Mumias owns 51 percent of that project in the Tana Delta, where it is partnered with the government and other investors.

Over 20,000 hectares of the delta will be planted with sugarcane. The project has been approved by Kenya's National Environment Management Authority, but has run into opposition from environmental groups and some livestock farmers in the area.

At its base in western Kenya, the company says it plans to double electricity output to 36 megawatts a day by next January.

Kidero says this will lead to an additional 26 megawatts going to the national grid.

Of the 13 megawatts it produces, the Mumias factory uses eight and feeds three into the national grid because of limitation of carriage infrastructure.