Lemur secures power purchase agreement

Bushveld Minerals has an update on Lemur, Bushveld’s coal and energy subsidiary, that is developing an integrated thermal coal mining and independent power producer asset in Madagascar.

Lemur has, through its Madagascan subsidiary Imaloto Power Project SARL, executed a binding power purchase agreement (PPA) with Madagascar’s state-owned utility, Jiro sy Rano Malagasy (JIRAMA). This will form part of the Imaloto Power Project in the country. The power plant will be located at the mine-mouth of Lemur Holdings’ coal deposit, which has about 136 million tonnes(Mt) of coal. The addition of a power component will unlock the value of the coal asset, while at the same time securing reliable electricity off-take backed by a government entity.

Image credit: Lemur Resources

“The signing of the Power Purchase Agreement with JIRAMA achieves a critical milestone in the development of Lemur’s integrated coal-to-power project,” comments Fortune Mojapelo, CEO of Bushveld Minerals. JIRAMA’s off-take is expected to increase in accordance with rising demand, starting with an initial 10MW of the nameplate 60MW capacity. For example, the current installed thermal generation capacity in the town of Tulear is already 15MW.

“Coupled with the on-going progress on the project’s bankable feasibility study, and our recent strengthening of the Lemur management team, this achievement adds significant value to the project and brings it even closer to implementation,” Mojapelo adds.

Lemur has identified numerous communities and industrial users, located between the Imaloto Power Plant site and Tulear, which will demand an additional 30MW of generation capacity. Negotiations are already in process for off-take agreements with these users.

“Since the Imaloto project uses coal which is a locally sourced fuel source for base load power, it will help reduce JIRAMA's exposure to the volatility of imported fuels. In the long run, we believe it will help Madagascar to increase its generation capacity while providing a source of affordable electricity to end users,” says Olivier Jaomiary, CEO of JIRAMA.

The significance of the PPA, however, far exceeds the size of the off-take. According to the laws of Madagascar, a PPA with a national utility is an essential pre-requisite for the development of an Independent Power Producer (IPP) project, especially the granting of generation licence or concession. With JIRAMA as the anchor off-taker, Lemur is now able to build on this achievement with several private consumer PPAs. The project is also on track to complete a bankable feasibility in the first half of 2018.

“Furthermore, this agreement delivers the anchor off-taker for the Imaloto Power Project in Madagascar. In addition to its established customer base, proven operational capability and existing mini-grid distribution infrastructure in the region, the agreement with JIRAMA secures the all-important support from the Government of Madagascar to provide reliable, base load electricity to the southern part of the island,” Mojapelo says.

The integrated project will act as an enabler for sustained electricity production for the population that has traditionally relied on subsistence or diesel power-based solutions. According to PowerAfrica, Madagascar currently has only 504MW of installed generation capacity catering to 24 million people. The Imaloto Power Project is planned to grow this by nearly 12% in a region that currently has no power grid. Furthermore, the base load coal-fired power project would also look to attract industries to the area, especially since the project includes transmission lines reaching major parts of south-western Madagascar to connect the power plant with multiple, currently off-grid, communities. “Overall, we expect the Project to help bring about economic development and create employment in Madagascar,” Jaomiary says.

The integrated nature of the project will facilitate significant financial benefits to the country overall, including planned direct investment of nearly USD300-million and over USD1-billion to the national fiscus revenue over the project’s lifetime from royalties, taxes and other types of government revenue.

“We thank the management of JIRAMA and the Government of Madagascar for their support and, together with local stakeholders, look forward in continuing to develop the infrastructure and economy in the southern Malagasy region,” concludes Mojapelo.



Pin It
Home News News Archive Lemur secures power purchase agreement

Connect with us

Talk to us

Available Monday - Friday, 8 AM - 4 PM
Call usemail us