This research investigates the profitability of bioethanol production in Africa, taking Ethiopia as a case in point, and suggests an oil price threshold beyond which biofuels may be profitable. Specifically, the study analyzes the viability of producing bioethanol from molasses in the context of Ethiopia, using data from a biofuels investment survey by EEPFE/EDRI in 2010. The study draw on investment theory as underlying conceptual framework and employ unit cost analysis for the empirical analysis.