Pioneering project secures long term financing, launches gas extraction barge, and breaks ground for power plant
NEW YORK, LONDON, THE HAGUE, Netherlands, and TUNIS, Tunisia, Aug. 26, 2011 /PRNewswire-Asia/ -- ContourGlobal announced today that it has signed agreements for a loan facility of $91.25 million with the Emerging Africa Infrastructure Fund, Netherlands Development Finance Company (FMO), the African Development Bank, and Belgian Investment Company for Developing Countries NV/SA (BIO) to support completion of Phase I of the company's KivuWatt project, an integrated methane gas extraction and production facility and associated 25 MW power plant located on Lake Kivu in Kibuye, Rwanda. The combined project will remove and process otherwise hazardous methane gas trapped in the waters of Lake Kivu for use as fuel to generate critically needed electricity for sale to Rwanda's Energy, Water and Sanitation Authority (EWSA). EWSA is the national power utility of Rwanda, where the vast majority of the population does not currently have access to electricity.
The signing of the loan agreements took place at today's ceremony at the KivuWatt project site, which also celebrated the launching of the 750 ton barge that will house the gas extraction facility and the groundbreaking for the power plant. The event was attended by representatives of ContourGlobal, the lending institutions, and the project's contractors, including Wartsila of Finland, which will manufacture the electricity generating engines and construct the power plant. Attendees also included numerous Rwandan dignitaries, among them Kayumba Bernard, Mayor of Karongi, Celestin Kabahizi, Governor of Rwanda's Western Province, and Coletha Ruhamya, Rwandan Minister of Energy and Water. Representatives from foreign embassies to Rwanda were also present, including Anne Capser, Charge d'Affairs, United States Embassy Kigali, and Ambassador from the Royal Netherlands Embassy to Rwanda, Frans Makken.
By tapping the indigenous fuel, which is comprised of sub-surface methane dissolved in Lake Kivu's deep water, the KivuWatt project will significantly lower the cost of electricity necessary to drive Rwanda's fast growing economy. It will also represent the first large scale use of the gas, the extraction of which will greatly mitigate the environmental hazards associated with a natural release of the lake gases as well as provide an environmentally friendly and sustainable source of power generation.
This 25 MW represents Phase I of the KivuWatt project, which has enjoyed extremely strong support from the international development community, as demonstrated by today's loan agreement signing as well as the May 2011 execution of a political risk insurance policy with the Multilateral Investment Guaranty Agency of the World Bank Group. Phase I, which will cost approximately $142 million to complete, has also engaged in extensive environmental studies and permitting activities, all in accordance with stringent World Bank standards, and will be followed by three more phases to ultimately reach 100 MW.
Joseph C. Brandt, President and Chief Executive Officer of ContourGlobal, said, "Today's critical milestones for ContourGlobal's path breaking KivuWatt project place it on a rapid path to completion. We greatly appreciate the leadership and creativity of our finance partners, EAIF, FMO and AfDB, and are honored that the Government of Rwanda has entrusted us to make this important contribution to the country's energy security."
AfDB Resident Representative in Rwanda, Negatu Makonnen, stated that the African Development Bank is proud to be involved in this transaction. "The KivuWatt project will provide affordable power supply with improved reliability that will increase electricity access to both rural households and businesses in Rwanda," Mr. Makonnen emphasized.
Tony Lea, Chairman of EAIF, said, "The KivuWatt project is one of the most innovative in the history of electricity generation. EAIF is delighted that its role as co-arranger of the debt finance will enable the exploitation of the renewable gas resource in Lake Kivu for the benefit of Rwanda and Rwandans."
"FMO strongly believes in this project to bring additional electricity generation to Rwanda using an indigenous renewable gas resource, which will boost economic and social development in Rwanda," said Huub Cornelissen, Director Energy & Housing of FMO. "FMO is delighted that its role as co-arranger of this financing has contributed to this innovative project, which fits well within FMO's mission of supporting private sector in developing markets."
About ContourGlobal
ContourGlobal is a New York based international power company with 3250 MW in operations or under construction in 20 countries. The private company was founded in late 2005 by Chief Executive Officer Joseph Brandt and Reservoir Capital Group, a $5 billion USD investment fund based in New York. With over 1500 people on four continents, ContourGlobal develops and operates electric power generation facilities powered by natural gas, hydro, wind, solar, biomass, coal and fuel oil. The Company focuses upon high-growth, under-served markets and innovative niches within developed markets. In 2011, the turnover of the group will be approximately $900 million USD.
For more information, visit http://www.contourglobal.com.
About the African Development Bank (AfDB)
The AfDB is a multilateral development bank whose shareholders comprise 53 African countries (regional member countries – RMCs) and 24 non-African countries (non-Regional Member Countries – non-RMCs). The Bank Group's primary objective is to contribute to the sustainable economic development and social progress of its regional members, individually and jointly. This objective is met by financing a broad range of development projects and programs through: (i) public sector loans (including policy-based loans), private sector loans, guarantees and equity investments; (ii) providing technical assistance for institutional support projects and programs; and (iii) emergency assistance grants. The Bank Group approvals in 2010 amounted to USD 6.5 billion. Through its private sector window, the AfDB provides a range of financial products to the private sector to complement its traditional lending operations to Governments, including financial and technical assistance for viable projects. Private Sector project approvals as at end of April 2011 reached USD 7.7 billion. Infrastructure, especially energy, is the core of Private Sector Operations priorities.
About EAIF
The Emerging Africa Infrastructure Fund ("EAIF") was established in January 2002 and is currently a US$600 million debt fund. EAIF is a Public Private Partnership able to provide long-term USD or EUR denominated debt or mezzanine finance on commercial terms to finance the construction and development of private infrastructure in 47 countries across sub-Saharan Africa. Sectors include telecoms, transport, water and power. While EAIF lends on commercial terms, it aims to support projects that promote economic growth and reduce poverty, benefit broad-based population groups, address issues of equity and participation, and promote social, economic and cultural rights.
EAIF is managed by Frontier Markets Fund Managers, a division of Standard Bank Plc.
For more information visit the EAIF website www.emergingafricafund.com.
About FMO
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on four sectors that have high development impact: financial institutions, energy, housing, and agribusiness. With an investment portfolio of EUR 5 billion, FMO is one of the largest bilateral private sector development banks.
For more information, please visit www.fmo.nl.
