Techno-Economic Assessment of Transforming Sorghum Bagasse into Bioethanol Fuel in Nigeria: (2) - Economic Analysis

The Nigerian government's need to reduce its over-dependence on the oil and gas economy is gaining more significance as the benefit derived from this resource has gradually begun to suffer from several uncertainties. With the vast green resource, Nigeria is blessed with, this need is raising an avenue to establish a strong link between the downstream petroleum industry and agricultural activities. The Nigerian government has indicated a commitment to biofuels production from local feedstock where the emphasis has been given to bioethanol and biodiesel with the projected annual local market possibility of 5.04 billion and 900 million Liters, respectively. The study, therefore, looked into the investigation of the economic feasibility of establishing a bioethanol plant that would process sorghum bagasse into a bioethanol fuel that would complement the use of petrol. The sensitivity of selected economic parameters was also investigated. Results obtained for the profitability analysis of the project was able to showcase the benefit the project tends to offer alongside the identification of potential sensitive variables that have a strong potential of influencing the project’s financial benefit were presented with the use of parameters such internal rate of return, net present worth, and short payback period. Findings from the study would reveal that the potential investment benefits and would further gain investors' confidence by unfolding several uncertainties that investors would like to have some answers to about the setting up of a bioethanol plant in developing nations like Nigeria.