20th Apr 2023 17:35
(Alliance News) - Savannah Energy PLC said on Thursday that its subsidiary had signed a memorandum of agreement with the government of the Republic of Cameroon for the development of a new hydroelectric project in the country's northern region.
Savannah Energy, an Africa-focused British independent energy company headquartered in London, said that the MOA had been signed by its wholly owned subsidiary Savannah Energy RCM Ltd.
The 75 megawatt Bini a Warak Hydroelectric Project will be located in Cameroon's Adamwa Region. The Bini Project, Savannah Energy said, "is expected to provide clean, stable and affordable power" to the area. It is also expected to support existing local electricity demand and enable a number of energy-intensive industrial projects, principally in the cement and metallurgy industries.
Savannah Energy further anticipates that the Bini Project will increase northern Cameroon's on-grid electricity generation capacity by over 50%, with the potential for power to be dispatched into Cameroon's southern electricity grid. The government aims to connect the northern and southern networks by 2026.
The Bini Project involves the construction of a dam on the Bini River, together with an 82 kilometre squared reservoir and associated tunnels, powerhouses, substations and a 225 Kilovolt transmission line connecting the Project to the northern grid. Project sanction is expected in 2024 and first power is predicted to be targeted between 2027 and 2028.
Savannah Energy said that it intended to fund the Bini Project with its own internally generated cash flows and project-specific debt.
"The Government is delighted to partner with Savannah Energy in order to deliver clean and affordable electricity to support our industrialisation plans for northern Cameroon. The Bini Project will address the current electricity shortages caused by the hydrology deficit of the Ladgo Dam and reduce the consequent reliance on expensive thermal generated power in the region," said Essomba. He further stated that the government "will provide all the support needed to enable Savannah to deliver first power from this exciting project in the 2027 to 2028 window."
Chief Executive Officer Andrew Knott said: "Savannah is seeking to continue to expand in Cameroon and we will continue to review other potential investment opportunities in the energy and sector. We expect the Bini Project will make a key contribution towards the attainment of Savannah Group's targeted 1GW of renewable energy projects in motion by the end of 2023."
Meanwhile, the company on Thursday signed a share purchase agreement with the national oil company of Cameroon, Societe Nationale Des Hydrocarbures. Societe will pay USD44.9 million for the shares to Savannah's subsidiary Savannah Midstream Investment Ltd.
Shares in Savannah Energy are currently suspended from trading. They were last traded in early December.
By Emma Curzon, Alliance News reporter
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