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Insight Magazine Issue 3 2017

  • Text
  • Leone
  • Economic
  • Bumbuna
  • Sector
  • Infrastructure
  • Businesses
  • Kamara
  • Projected
  • Economy
  • Investors
  • Www.ftinsight.net
Sierra Leone's most authoritative business and investment magazine. Interviews with Henry Macauley, Joule Africa, Abu Kamara, Joseph Fitzgerald Kamara and more.

ENERGY Bumbuna II -

ENERGY Bumbuna II - it’s a power thing Plans for the first phase of the Bumbuna hydropower project were unveiled in 1975. Eighty-five percent of construction was complete by May 1997, when it was halted because of civil war. The project was restarted in 2005 and was completed in November 2009. Almost eight years later, in August 2017, Joule Africa signed a 25-year Power Purchase Agreement (PPA) with the Government, for electricity from a 143-MW expansion of the 50-MW Bumbuna station. It was an important milestone in the development of the project. Insight Magazine talked to Joule Africa to find out more about Bumbuna II. Tell us about Joule Africa, its experience in the energy sector and its objectives as a company. Joule Africa was established in 2011 and is a developer, owner and operator of sustainable power projects in Africa. Through the development and operation of sustainable energy assets, Joule Africa is committed to significantly increasing access to energy for the African nations in which it is needed most, a fundamental factor in any country’s ability to develop. years later. Seli Hydropower will provide electricity to the Electricity Distribution and Supply Authority (EDSA) for the next 25 years at an agreed tariff. This project has been a long time in the making, the structure of the company has changed (for example the buy-out of Endeavour). What challenges have you encountered so far in this project and how have you managed them. Hydropower projects require extensive detailed planning, due diligence, assessment, modelling and consultation and as a result, tend to take a certain amount of time to get to the stage we are at today. We are proud that we are developing Bumbuna II in line with international best practice. It is unfortunate that during the last six years, Sierra Leone has also been confronted with the tragic Ebola crisis which paralysed the country for a considerable amount of time. Having been involved in the country since 2011, Joule Africa has a good understanding of how to do business in Sierra Leone. We have a close working relationship with our local partner, ESCO, and have built up some important connections with local businesses, government and the local communities over the past five years. We have a first-class, international team who have spent considerable time assessing the social and environmental considerations and are now in the process of finalising the respective action plans. We continue to be in dialogue with the Paramount chiefs and their respective communities. As regards the construction of Bumbuna II, we have been collaborating with the European Investment Bank to ensure that the project will be constructed in line with international best practice. We are close to appointing an internationallyrecognised contractor. The senior team of Joule Africa has a wealth of experience in developing and operating power projects across emerging markets, including overseeing the development of 10 GWh of power assets across Africa. Bumbuna II is Joule’s most advanced project; its second project - Kpep, is a 485MW hydropower project in Cameroon, which is currently embarking on the full feasibility stage. Explain the roles of Seli Hydropower and Energy Services Company (ESCO). Seli Hydropower is the registered project company in Sierra Leone, responsible for overseeing the successful development and operation of Bumbuna II. Seli Hydropower has overall responsibility for ensuring that Bumbuna II is developed safely and to a high standard, that the affected communities are well looked after and that affected environments are preserved and maintained. Seli Hydropower will also be responsible for the continued operation of Bumbuna I. Energy Services Company (ESCO) is Joule Africa’s local partner in Sierra Leone. ESCO provides various important local services, including supporting Seli Hydropower on its responsibilities towards the Government of Sierra Leone, the local communities and the local environment, as well as additional advisory and logistics services. How will Bumbuna II benefit Sierra Leone? Bumbuna II is a renewable power project, which will be harnessing Sierra Leone’s natural resource, in the form of heavy. seasonal rainfall. When operational, forecast to be in 2022, Bumbuna II will provide affordable, reliable, clean electricity throughout the year. At its peak it will be able to produce 143MW of additional capacity with a guarantee of 80MW of firm/guaranteed base power throughout the year. Experience shows us that this much-needed additional capacity will provide the opportunity for businesses and industry to grow, stimulating economic growth, while allowing households to become less dependent on existing dirtier, less healthy fuel alternatives and enjoy a better standard of living. As well as the provision of much-needed guaranteed electricity throughout the year, Bumbuna II also means significant local employment Joule Africa has signed a 25-year Power Purchase Agreement (PPA) with the Government. How does that work? Under the conditions of the Power Purchase Agreement (PPA), Seli Hydropower will build an extension to the existing 50 MW hydro station, Bumbuna I, situated in the north east of the country, adding a further 143 MW of power capacity. Construction on the extension, Bumbuna II, is anticipated to start by mid-2018 with operations forecast to start four How is Bumbuna II financed and what factors were taken into account when financing this project? In terms of financing Bumbuna II, we have made good progress in securing the funding which will mainly come from organisations who are familiar and comfortable with investing in Africa and power projects. It is being financed by a combination of debt and equity and is being secured in such a way that we are able to generate electricity at an affordable tariff. The investors in Bumbuna II also share our long-term commitment to the project. Sierra Leone is experiencing the effects of climate change. How will this affect Bumbuna and will Bumbuna have any positive or negative impact on the effects of climate change in Sierra Leone (i.e. access to safe water)? With Bumbuna II, the availability of water is not predicted to be a significant issue. Data from the Bumbuna II Climate Change Resilience Assessment suggests that there is likely to be a general increase in precipitation across all seasons with an increase in flooding and heavy rain in some seasons. However, the data also suggests that there may be a decrease in the number of days with at least 1mm of rainfall, suggesting also that periods without rain may lengthen. The Bumbuna II project includes the creation of the Yiben reservoir which will have 4 times the usable storage capacity of the existing reservoir. This will make it more resilient to any decrease in days with at least 1mm of rainfall than the current Bumbuna I Hydro Electric Project configuration. This will enable both the existing and new power plants to be supplied with a more stable supply of water for power generation all year round. This will also result in a large increase in the power that can be generated all year round. What does the Bumbuna project contribute to Sierra Leone in terms of capacity building/skills transfer etc? Aside from the direct skills transfer during the construction of Bumbuna II, there will be further capacity building and training opportunities and initiatives, to be outlined in the Resettlement Action Plan (RAP) and the Community Development Action Plan, which will benefit local communities. These are being devised in consultation with the local communities. Our aspiration is that a significant proportion of the operating staff for the new scheme will be Sierra Leonean citizens. Where practical we will be recruiting local labour and sourcing local materials. As part of our agreement with the contractor, appropriate training will be provided. Explain the choice of construction and engineering firms. In partnership with our engineering advisers, Lahmeyer, we have conducted a comprehensive and rigorous tender process, resulting in a short-list of three internationally recognised bidders. The three bidders have extensive experience in working on similar projects and in Africa and two have already worked in Sierra Leone. 11 www.insight.sl

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