Green Fuel Private Limited, a company with links to controversial businessman Billy Rautenbach, on Thursday said the government which wants a 51 percent stake in the fuel blending company, should pay for the shares at market value to avoid prejudicing investors.
The company is a joint venture between the state-controlled Agricultural Rural Development Authority (ARDA) and companies linked to Rautenbach - Macdom Investments and Rating Investments.
It was controversially issued an ethanol production or mandatory blending licence last August despite massive disagreements in the unity government cabinet and the Zanu PF government following the 2013 elections.
Opponents argued the company’s licensing would result in an individual benefiting at the expense of the nation. ARDA has 10 percent shares in the company and now the government has indicated it wants to acquire a 51 percent in the firm.
But parliament heard from Green Fuel officials on Thursday that they are ready to comply with the government’s directive to convert the project from a Build, Operate and Transfer system to a joint venture with the government having the majority shareholding.
Green Fuel general manager, Greame Smith, told the committee government must pay to acquire the majority shares in the firm.
Macdom Investments, he said, has since ploughed in more than $330 million into the firm, representing a 90 percent stake in the project while government has put in $37 million, an equivalent of 10 percent shares.
Green Fuel legal advisor adviser Derek Elliot said they are negotiating with the Agriculture, Energy and Indigenization ministries to implement the government directive.
The officials refuted reports that they owe the Zimbabwe National Water Authority about $7 million, saying it was ZINWA which is owed the company slightly more than a million dollars.
They said the company had also carried out and submitted its environmental impact assessment report to the Environmental Management Agency but is yet to get a response.
The law stipulates that in the event that the EMA does not respond in 60 months the report would be deemed approved.
The officials said their company had faced stiff resistance from foreign and local oil companies, who fear mandatory blending saying this would eat into their profits. They said the situation is now under control.
The company, which produces ethanol for blending with unleaded petrol, said while the blending threshold had been reduced from E15 to E10 due to sugarcane shortages caused by flooding, it was working on measures to build reserve stocks that could last for up two months.
The Zimbabwe Energy Regulatory Authority announced mandatory blending of fuel ethanol at the level of 5% ethanol and 95% unleaded petrol on August 15 last year.
This followed the issuing of an ethanol production licence to Green Fuel on August 5 but fuel prices have not dropped following the introduction of mandatory fuel blending.
Former Energy Minister Elton Mangoma, who refused to grant Green Fuel a license during his time in cabinet, said the company’s licensing soon after the elections was scandalous because it would result in an individual benefiting at the expense of the nation.