https://www.miningweekly.com

Sierra Leone hydropower joint venture to lower mining costs, boost mining capacity

6th December 2013

By: Sashnee Moodley

Senior Deputy Editor Polity and Multimedia

  

Font size: - +

Independent power development and gene- ration company Endeavor Energy has entered into a joint development agree- ment (JDA) with international power developer Joule Africa to develop, finance and construct the $700-million Bumbuna Phase 2 hydro- electric power project, in Sierra Leone.

The project will add an additional 202 MW to the existing 50 MW at Bumbuna Phase 1, which will mean lower mining costs and a potential increase in mining capacity, says Endeavor Energy CEO Sean Long.

He adds that the lack of available power in the country is the result of under- investment in the energy sector, with the current national power generation capa- city sufficient to light one bulb a day for every person in Sierra Leone.

Endeavor, in partnership with Joule Africa and the Sierra Leone government, hopes to play a role in changing this by tripling the power generation capacity in the country and demonstrate to the global investment community, through its investment in Bumbuna Phase 2, that Sierra Leone is a great place to invest.

Further, microenterprises and small businesses, which provide the bulk of self-employment opportunities, will find it difficult to grow without reliable energy.

With Phase 2, the national installed capacity will increase from 80 MW to nearly 300 MW. The energy generated from Bumbuna Phase 2 is significantly lower than current thermal power generation alternatives.

Bumbuna Phase 2 is the first project for Endeavor Energy, since its formation in June, following an initial commitment from energy-focused global private-equity firm Denham Capital’s $3-billion fund.

As part of the JDA, Endeavor Energy has agreed to fund the remaining development costs for the project and expects to invest up to 75% of the project’s equity at financial close, which is estimated at $150-million.

The additional power supply is mostly aimed at meeting the current power demand, owing partially to mining activities and to residential and commercial demand.

“With the active support the Sierra Leone government is providing, we expect that the development of the project will be completed quickly and, once the project comes on line, it will enable growth in the mining and small business sectors of the country’s economy,” says Long.

He states that the greatest single source of unmet power demand in Sierra Leone is from the iron-ore mining firms that are located north of Sierra Leone, near the Bumbuna dam.

Long adds that the company expects Bumbuna Phase 2 to significantly reduce the cost of electricity to the mining industry and that iron-ore mining firms will benefit from the low-cost energy generated by the project.

Mining companies currently self-generate a significant portion of their power requirements using medium- and high-speed diesel generators, which is costly.

Power use agreements are being discussed by the Sierra Leone government and include a market structure that envisions a single power trader or bulk trader, owned by govern- ment, that will acquire power generated by independent power producers. The bulk trader will then on-sell power to bulk off- takers, mining companies and residential and commercial users.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION