Savannah Energy PLC, a London-based independent energy company focused on Africa, has announced the signing of a memorandum of agreement with the government of Cameroon. The agreement was made through its wholly-owned subsidiary, Savannah Energy RCM Ltd, for the development of a new hydroelectric project in the country’s northern region.
The Hydroelectric Project and Its Benefits
The project, called the Bini a Warak Hydroelectric Project, is a 75 megawatt project that will be constructed on the Bini River, alongside an 82-kilometer squared reservoir and associated tunnels, powerhouses, substations, and a 225-kilovolt transmission line. It is expected to 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 Bini Project will also enable a number of energy-intensive industrial projects, mainly in the cement and metallurgy industries. Furthermore, the project is anticipated to reduce the dependence on expensive thermal-generated power in the region, caused by the hydrology deficit of the Ladgo Dam.
Savannah Energy’s Financing and Government Support
Savannah Energy has indicated that it will fund the Bini Project with its own internally generated cash flows and project-specific debt. The project’s approval is anticipated in 2024, and the company plans to target the first power output between 2027 and 2028. The government aims to connect the northern and southern networks by 2026.
Essomba, a representative of the government, said that the government is delighted to partner with Savannah Energy to deliver clean and affordable electricity to support industrialization plans for northern Cameroon. The government is committed to providing all the support needed to ensure Savannah delivers first power from this exciting project.
CEO Andrew Knott stated that the Bini Project is expected to make a significant contribution towards Savannah Group’s target of 1GW of renewable energy projects in motion by the end of 2023.
Acquisition of Savannah Midstream Investment Ltd
Savannah Energy has also 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.
The project is expected to provide clean, stable, and affordable power to the northern region of Cameroon and support industrial growth in the area.
