Lemur Resources to develop Coal-Fired Power Station in South Western Madagascar
Trade Invest Africa, an enterprise by the DTi hosted the Madagascar Investor Conference at the DIRCO Conference Centre in Pretoria in partnership with the Development Bank of South Africa (DBSA) on the 14th– 15th June 2017.
The conference, led by the Honourable President Mr. Hery Rajaonarimampianina highlighted Madagascar’s National Development Plan, Presidential priority projects, trade and investment opportunities, business climate, political and economic framework as well as specific guidelines on doing business in Madagascar. The conference also expanded upon the country’s development imperatives and showcased the experience of South African companies operating in the country with a presentation from Bushveld Minerals’ Lemur Resources by representatives Anthony Viljoen and Prince Nyati.
Lemur Resources is in the process of developing an integrated Coal-fired Power Project in the Southwestern region of Madagascar. The project is in bankability stage and phase 1 of the project consists the following 3 key areas:
- 136 million ton coal mine
- 60MW Coal-fired power plant (scalable up to 1000MW -depending on future demand)
- over 200kms of transmission line
From inception, Lemur Resources has invested over USA $10 million in developing the project in South Western Madagascar and having completed the relevant feasibility studies the project is currently in the feasibility stage and undergoing a detailed design.
In March 2017, the company finalized an MOU with Power China/Sinohydro to cooperate on a technical and potentially, financial basis. Under the terms of the MOU, Sinohydro will be the Engineering Procurement and Construction (EPC) and Operations and Maintenance (O&M) partner. The MOU will also give the two companies the opportunity to explore debt financing and equity participation options with Power China as well as other Chinese Funders.
In May 2017 Lemur Resources completed a joint technical project site visit with Sinohydro, which marked the final stages of work before the commencement of the construction phase which was subject to financial close, currently expected within the next 18 months.
Apart from providing affordable and reliable power to the people of Madagascar, the Project will provide approximately 1700 direct jobs, which will indirectly economically impact over 13,000 people in the poorest region in the country within the next 3 years.
In terms of the national financial impact, the project will inject approximately US$ 300m of FDI within 3 years. In addition, the project will contribute about US$30m per annum to the national revenue; which amounts to over US $1billion over the life of the project.
In order to progress the project and meet the target timeline of breaking ground before December 2018, Lemur Resources will require the necessary approvals from the Government of Madagascar. The company has so far been granted a Mining Exploitation License and is looking for Government’s continued support in obtaining a concession for the power plant and transmission line from the Ministry of Energy. Anthony Viljoen addressed delegates saying:
“Our continued presence and ongoing financial support of our project is evidence of our commitment to unlocking the development potential of Madagascar, particularly, the South Region. We will continue to support and cooperate with government’s efforts to promote economic development to Madagascar.”