DAR ES SALAAM (Reuters) - Brazil, the world's leader in sugar cane-based ethanol production, wants to help Tanzania develop its biofuel sector and will consider waiving debt worth $240 million, its president said on Wednesday.
Signing a memorandum of understanding between the two countries, Brazilian President Luiz Inacio Lula da Silva urged his countrymen to invest in the agriculture sector of east Africa's second largest economy.
"Brazil has the highest technology in tropical agriculture in the world and is willing to transfer this technology," said Lula. No details on the memorandum were immediately available.
"We would like the Brazilian business community to invest in agriculture in Tanzania so that Tanzania can make biofuels in the same way that Brazil does," he added.
Lula said Brazil was open to talks on the possibility of waiving off Tanzania's $240 million debt with the South American country.
Soaring fossil fuel costs and concerns over carbon dioxide emissions that contribute to global warming have led investors to turn to cleaner energy sources like biofuels. Many are focusing on Africa.
"Biofuels is one of the areas where we have a huge potential. We have many valleys where we grow a lot of sugarcane, mostly for making only one product (sugar) for local consumption," said Tanzania's President Jakaya Kikwete.
Kikwete said implementation of a project by Swedish biofuels firm Sekab, which plans to start producing 100 million litres of ethanol a year in Tanzania by 2012 at a cost of between $200 million and $300 million, had been delayed by the global financial slowdown.
He said the Tanzanian government had already given the Swedish investors 30,000 hectares (74,130 acres) of land for the biofuels project and was ready to allocate close to 200,000 hectares for the initiative.
"We need investments in Tanzania and there is surplus capital in Brazil ... diplomacy has to serve the economic interests of our countries," said Kikwete, who described the volume of trade between Tanzania and Brazil as shameful.
