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The past few years have seen a phenomenal rise in the production and consumption of biofuels and biodiesel at the global level. This development is of special significance to Africa, where about 550 million people (75% of the total population in Sub-Saharan Africa) depend on traditional biomass (wood, charcoal, cow dung, etc.) and lack access to electricity or any kind of modern energy service. Derived from plants and agricultural crops, biofuels and biodiesel represent modern forms of bioenergy and more efficient use of biomass energy. Beyond efficiency, modern bioenergy offers tremendous opportunities to meet growing household energy demands, increase income, reduce poverty, and mitigate environmental degradation. In the African setting, energy and livelihoods security are indeed inseparable. This paper argues economic, social, and environmental benefits of modern bioenergy can be realized through a strategy that centres on smallholder production and processing schemes and pursuit of a livelihood approach to energy development. Such a scheme opens up new domestic markets, generates new cash incomes, improves social wellbeing, enhances new technology adoption, and lays the ground for rural economic transformation and sustainable land use. The paper concludes by underlining the vital importance of considering sound property rights and strategic planning of sustainable development as tools for sustainable energy and livelihoods security. [ABSTRACT FROM AUTHOR]