Annual Report Harel Frère Ltd 2006 - Investing In Africa

managing director’s
30 review of operations (cont'd)
Energy
The group, through its subsidiary Société HBM, has a 40.3%
effective interest in Compagnie Thermique de Belle Vue
Limitée (CTBV). The latter owns a 70 MW bagasse / coal
fired power plant situated in Belle Vue. It is adjacent to the
sugar mill which supplies it with bagasse in exchange for
energy requirements. Other shareholders are our strategic
partner Séchilienne-SIDEC (27%), the Sugar Investment
Trust (14%) and the State Investment Corporation (8%).
CTBV has signed a long-term contract with the Central
Electricity Board (CEB). Under these terms, it supplies
electrical power to the grid throughout the year.
Management
The day-to-day operation of CTBV is entrusted to CTBV
Management Co Ltd (CTBVM), which employs around 49
staff, comprising of one expatriate. CTBVM is controlled
by Séchilienne-SIDEC, which holds a 67% interest. The
other main shareholder is the Harel Group, with a 28%
holding. Overall management of CTBV is jointly assumed
by Séchilienne-SIDEC and Harel Frères Limited. The former
is responsible for technical support, with a view to optimise
plant efficiency, both in terms of operation and energy
production, while Harel Frères Limited has an administrative
responsibility.
With regard to the handling and stocking of coal, a separate
entity, Coal Terminal (Management) Co Ltd (CTMC), runs
these operations from the company's depot, situated in
the port area. Coal is jointly imported by CTBV and other
energy producers and stocked at the depot, from where it
is dispatched to users. During the year, CTBV ceded part
of its shareholding in CTMC to Compagnie Thermique de
Savannah Limitée, thus diluting its stake in CTMC from
38.63% to 30.26%. The disposal of shares has given rise to
proceeds of MUR 4.2 M.
Performance and operations
The power plant performed satisfactorily during the year,
with an availability level of 99.1% which is well above
minimum contractual obligations. Energy exported to the
grid amounted to 358 GWh, which is roughly equivalent
to last year’s performance. However, owing to a better
harvest, energy production from bagasse increased from 89
GWh in 2005 to reach 99 GWh in 2006. In fact, the plant
consumed 262,145 tonnes of bagasse in 2006 as compared
to 230,863 tonnes in 2005.
The company met its supply commitments to the CEB for
the contractual year ended June 30, 2006 and, in addition,
generated some 21,5 GWh at a reduced tariff, over and
above the minimum take. CTBV is confident of fulfilling its
Harel Frères Limited Annual Report ‘06