Cameroon's Lom Pangar gets World Bank funding, new hydro project progresses

The World Bank's Board of Executive Directors has approved a US$132 million loan for Cameroon's 56 MW Lom Pangar project while the nation's leaders and an energy developer announced plans for a new, unrelated project.

The World Bank's zero-interest financing for Lom Pangar is being made to "support the country's economic development" and "significantly improve the supply of electricity to homes and businesses across Cameroon," officials say.

The bank says the immediate benefit will be a 120 MW increase in generating capacity at two existing hydro plants.

Located on the Sanga River, the facilities are expected to help store water during the rainy season and increase Cameroon's hydro capacity by about 40%.

"Africa's energy deficit suppresses its growth and deepens poverty, and this is certainly the case in Cameroon where many communities are starved for energy," says Obiageli Ezekwesili, World Bank president for the Africa Region. "Lom Pangar marks an important step in turning the lights on in more homes and businesses, lowering power costs, attracting new investors and improving the all-season reliability of the country's electricity."

Ezekwesili also notes that Cameroon has the third-largest untapped hydropower potential in sub-Saharan Africa, with as much as 12,000 MW still to be had.

Meanwhile, emerging markets energy developer Joule Africa and the Republic of Cameroon have signed a memorandum of understanding for the development of a new 450 MW plant.

The US$1 billion Kpep facility, to be on the Katsina-Ala River near the Nigerian border, will increase Cameroon's installed capacity by at least 40%.

Brazil: Work suspended on one project, advancing on another

Brazil's federal court has suspended work on the 1,800 MW Teles Pires project in the Amazon basin, state news service Agencia Brasil says. The decision voids the installation license awarded by Brazil's environment regulator, Ibama, in August 2011.

Irregularities reportedly identified by the court include a lack of prior consultation with indigenous groups, which is in conflict with Brazilian and international law. The court says it will fine project owner Teles Pires Energia Eficiente US$55,000 per day should it not comply with an immediate suspension of natural rock explosions.

The project is in limbo as the government is deciding whether to uphold the court's restraining order.

Teles Pires Energia is a consortium comprised of Neoenergia, Eletrobras Furnas, Eletrobras Eletrosul and Odebrecht.

In other news, Arcadis has signed a US$146 million deal with Norte Energia S.A. to provide owner's engineering services for Brazil's 11,200 MW Belo Monte project. The Norway-based company will carry out its work via its Brazilian subsidiary, Arcadis Logos, and joins Themag, Concremat and Engecorps as part of a consortium.

Arcadis says the consortium will perform design certification, construction management and supervision, planning coordination, expediting and commissioning activities for Belo Monte on the Xingu River in the state of Para.

Belo Monte is expected to require US$15 billion for civil works, equipment and environmental compensation and to begin operating in 2015.

Despite the delay at Teles Pires and other plants in Brazil, the government's federal mining and energy ministry says Brazil's power supply is not threatened. Brazil's 10 year energy plan says the country must add 70 GW of power to its national grid by 2020. Officials say 65% of that total has already been contracted.

A time surplus has always been part of the plan, says Altino Ventura, ministry planning and development secretary, meaning interruptions in development shouldn't cause supply problems.

Mozambique gets full control of Cahora Bassa owner

Government officials have signed an agreement that will put 100% control of Hidroelectrica de Cahora Bassa, operator of 2,040 MW Cahora Bassa on the Zambezi River, in Mozambique hands.

Until 2007, Portugal held the majority of HCB with an 82% share, although an agreement worth about US$700 million left Mozambique with 85% control and Portugal the remainder.

Under this arrangement - signed by Mozambican President Armando Guebuza and Portuguese Prime Minister Pedro Passos Coelho - the transaction will take place in two stages.

Mozambique will acquire the first half of Portugal's 15% share in September for $42 million. The remaining 7.5% will then pass through the hands of Portugal-based Redes Energeticas Nacionais, which operates the Portuguese national electrical grid. REN will then relinquish its holdings in HCB in exchange for shares in a yet-to-be-established company that will operate a new transmission line in Mozambique.

Report shows potential for hydroelectric development in Latin America, Africa

A report released by market analysis firm GBI Research predicts that increased government support of hydroelectric power will encourage investments from both the public and private sectors.

GBI says such support will lead to the development of "unexploited hydropower potential found in Latin America and Africa" and that hydroelectricity is expected to remain the highest contributor to global renewable power.

The report, "Hydro Power Market to 2020 - Energy Management Strategies and Green Funds to Drive Emerging Markets in Latin America and Africa," examines the regulatory framework and infrastructure in 17 countries to forecast the potential for major and emerging hydropower markets.

The analysis shows the global hydropower cumulative installed capacity increased 4.2% between 2005 and 2010 - translating to a rise from 601.1 GW in 2005 to 739.2 GW in 2010. That number is expected to increase to 1,051.1 GW by 2020, a rate of 3.6%, says GBI.

According to the report, Africa is expected to become an "emerging hydropower market" by 2020, although GBI notes that a lack of proper infrastructure and investment has hindered the maintenance and renewal of existing hydro plants. Increasing demand and the development of lucrative policies and incentives will help secure future investments, says GBI.