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Minor Field Study for the International Finance Corporation (IFC) and the Worldbank Group: Investment conditions for a bio-fuel pellet production in Bolivia contributing to an improved and sustainable indigenous forestry
KTH, School of Industrial Engineering and Management (ITM), Production Engineering.
KTH, School of Industrial Engineering and Management (ITM), Production Engineering.
2010 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This report presents the findings from a Minor Field Study aimed to describe the preconditions for an investment in large-scale Bolivian production of wood pellets for export contributing to an imrpoved and sustainable indigenous forestry. The study was carried out on behalf of the International Finance Corporation, IFC, a member of the World Bank Group that promotes sustainable private sector investment in developing countires as a way to reduce poverty and improve poeple´s lives.

Wood pellets are dried biomass processed into an easily combustible pellet form that offers a renewable and carbon neutral fuel source with higher energy density and more efficient transport properties than most traditional biomass energy sources. The global demand for pellets is strong and predicted to grow by over 25% per year until 2020. Bolivia is a country rich in natural resources with over 53,6 million ha of forest. But despite both the natural resources and a global demand for forest products Bolivian forest exports are very low. At the same time the large indigenous population, who possesses large unexploited land and forest is very poor and lack work. A large-scale  investment in a pellet production seems to have the potential of increasing Bolivian forestry export and thus improve the living conditions for indigenous.

By the means of a field study in the Bolivian forestry sector and researching literature and scientific reports this project has tried to create a business case analyzing the preconditions in Bolivia in a way that is relevant for a potential commercial investor. The work has resultes in a business case analyzing three major segments; the global wood pellet market, Bolivia on a national level and finally the Bolivian forestry sector on an more detailed level including a cost estimation for a potential pellet plant. The study finds that while Bolivia offers investors great opportunities with large forest reservs and vacant land for plantations in combination with a beneficial legislation. However, important weaknesses are the complicated business climate, small and fragmented wood supply and costly and complicated transportation. The study identifies three urgent and prioritized issues in the Bolivian forestry sector and suggest next steps to take in order to face the challenges. Furhter the study concludes that in order to be able to serve as a major supplier of wood the indigenous actors will have to be organized on an aggregated and commercial level. The organization would need long-term involvement of a commercial actor to train, equip and bring together the indigenous sppliers. If done successfully the indigenous groups could benefit from being a supplier with access to an international, fast growing market without having to masterinternational business. This can in turn lead to increased sustainable wealth with new job opportunities and improved social conditions. The study also suggests that indigenous groups could profit from new forest plantation on their fallow land while it also would bring improved environmental conditions, increased wood supply with facilitated extraction and higher productivity.

Place, publisher, year, edition, pages
2010. , 76 p.
, Master's Project in Production Engineering, 408
National Category
Engineering and Technology
URN: urn:nbn:se:kth:diva-49740OAI: diva2:460236
Educational program
Master of Science in Engineering - Industrial Engineering and Management
Available from: 2011-11-29 Created: 2011-11-29 Last updated: 2011-11-30Bibliographically approved

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