HRW Briefings

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.

The company also says South and Central America have the potential to be hotbeds for hydroelectric development – particularly Venezuela which has, after its energy crisis of 2009-2010, used national utility Corpoelec to invest heavily in hydropower projects.

Signs of hydro development heating up in Latin America are backing up the study’s conclusions.

Spain-based construction firm Copisa recently announced it won a contract for building the 50 MW Torito plant in Costa Rica, sources report. The contract, awarded by developer Union Fenosa Generadora Torito, is worth about US$29 million.

And in Ecuador, the 275 MW Minas San Francisco plant has been approved by the country’s environmental ministry, sources report. The US$500 million project includes a 78 meter-high dam, three Pelton-type turbines and a 45 km transmission line.

Guatemala’s Palo Viejo hydropower facility operational

Enel Green Power says its 85 MW Palo Viejo plant has been connected to Guatemala’s national grid. The US$200 million project was supported by public-private finance institution Simest.

Enel says Palo Viejo’s completion increases its Guatemalan portfolio to five hydro plants, with a total capacity of 161 MW. Israel’s Solel Boneh International planned and built the project.

Indonesian utility to build three new hydropower plants

Three new plants representing an investment of US$2.91 billion will be built in Indonesia.

The facilities will be “huge investments” and will be given to private developers, according to Nur Pramudji, president of Indonesia’s Perusahaan Listrik Negara.

The Karama plant will be a 450 MW, $1.2 billion project in the country’s West Sulawesi province. It will be constructed by PT Sulbar Group and China Gezhoumba group.

The second will be constructed by PT Kerinci Hydro Energy with a 450 MW capacity and a $510 million price tag. It will be in Kerini, Jambi Province.

The third, Batang Toru, will have a 500 MW capacity and an estimated total investment of $1.2 billion. Operational Cooporationi Dharma Hydro has been awarded its contract.

100 year-old Linton Falls hydro plant producing electricity once more

A historic plant in England’s Yorkshire Dales is producing electricity for the first time in more than six decades after an eight year restoration.

The Linton Falls plant, in the Yorkshire Dales in northern England, features two Archimedean screws that can produce up to 500 MWh of electricity per year. The restoration was executed by JN Bentley Ltd., which says it had an added challenge given the historical nature of the facility.

The plant was built in 1909 to power the village of Grassington but deemed obsolete when England’s national grid came into existence in the late 1940s. The plant is owned by the Linton Falls Hydroelectric Power Co.

The Linton Falls plant, in the Yorkshire Dales in northern England, was recently restored and put back into service, with a production of 500 MWh of electricity per year.

Financing plan moving ahead for Tarbela upgrade in Pakistan with IBRD loan approval

The International Bank for Reconstruction and Development has approved a US$400 million fixed spread loan for use on Pakistan’s Tarbela IV Extension project.

The loan has a maturity of 21 years – including a grace period of six years – and is in addition to an earlier $440 million loan granted by the World Bank’s concessionary lending arm, International Development Association.

“The Tarbela IV hydropower project will enhance Pakistan’s energy security by adding low-carbon, least-cost and renewable hydro power to its energy portfolio,” says Rachid Benmessaoud, World Bank country director for Pakistan.

Tarbela Dam is on the Indus River about 60 km northwest of Islamabad and has a capacity of 3,478 MW. The Tarbela IV extension project seeks to add an additional 1,410 MW by building a new powerhouse on an already constructed tunnel at the plant.

The project received financial assistance from the U.S. Agency for International Development in March 2011.

Canada’s Dia Bras sells hydropower assets in Peru to Volcan Compania Minera

Canadian mining company Dia Bras Exploration Inc. has completed the sale of its hydroelectric assets to Volcan Compania Minera S.A.A. via its Peruvian subsidiary Sociedad Minera Corona S.A.

Dia Bras and Corona signed a memorandum of understanding on February 21, then completed the C$46.38 million (US$46.78 million) deal on March 1.

Dia Bras will receive C$23.3 million ($24.51 million) net of third-party payments as a result of the sale of the hydro assets. The figure represents its 81.7% equity stake in Corona. Through wholly-owned subsidiary Dia Bras Peru S.A.C., Dia Bras Exploration acquired Minera Corona in May 2011.

Yesidu commissioning success dampened by deaths of 10 workers at Kopru Dam

The 22.3 MW Yesidu dam and power plant was commissioned after the provisional acceptance procedures were completed by the Turkey’s Ministry of Energy and Natural Resources, according to officials with the company that is overseeing the project’s construction. But the company is also dealing with the aftermath of a major accident at one of its other facilities.

Yesidu, built by Ozaltin, is on the Euphrates River in eastern Turkey. The company announced the government’s action in early February.

But heavy rains caused a gate in the diversion tunnel to break at the under-construction Kopru Dam in south-central Turkey, killing 10 workers. Company officials say they are cooperating with the government’s investigative authorities to find out why the accident occurred.

“This case has been already started to be investigated and tracked by the judicial authorities, and all the information and documentation required by the public prosecutors have been submitted at their offices,” the company says. “Currently, we can only submit the related information and documentation to the prosecutor’s office, in accordance with the instructions provided by the prosecutor’s office to us. It is kindly announced that after the official investigations come to a certain and final conclusion… the information related to this case will be publicly shared.”

DHV reports improved net profit for 2011-2012

International consulting and engineering firm DHV Group has recorded a “strong improvement of financial results” for 2011, the company says in its annual report.

DHV says it had revenue of nearly US$558 million, which constitutes a net profit of about $9.6 million for 2011.

DHV announced its plan to merge with consulting firm Royal Haskoning in March.

That merger is still expected to be formalized mid-2012. The resulting company will be called Royal Haskoning DHV and will be headquartered in Amersfoort, the Netherlands. It is expected to employ 8,000 people in more than 100 offices and 35 countries.

DHV works primarily in the water and transportation fields and has a staff of 4,300 in 70 offices.

Inter-American Development Bank reports significant increase in renewable investments

The Inter-American Development Bank has significantly increased its lending for private sector projects related to renewable energy efficiency.

Last year, the IDB approved US$736 million in long-term financing for green investments in Latin America and the Caribbean, with a similar amount anticipated for 2012. By comparison, IDB lent $663 million total in similar investments between 2000 and 2010.

“The IDB provides access to tailored long-term financing not readily available in local capital markets for these types of projects,” says Hans Schulz, head of IDB’s structured and corporate finance department.

The bank says the increased lending is partially reflective of changing needs from its 26 borrowing members and partially a strategic shift following its own capital increase. One of the goals set in IDB’s capital increase agreement calls for 25% of the bank’s lending portfolio to support climate change and environmentally friendly initiatives, IDB says.

Among IDB’s recent hydro-related investments are: 54 MW Peligre, 50 MW Centroamerica, two Furnas Centrais Eletricas S.A. projects, the 155 MW La Confluencia facility, and 306 MW Reventazon.

With regard to Peligre, Alstom-Comelex has signed a three year, US$48.4 million contract with the government of Haiti to restore the plant.

Peligre’s operator, Electricite d’Haiti, solicited bids for the project in January 2010 and received a $20 million grant from IDB in December 2011.

Currently, IDB says the facility operates at a fraction of its potential, forcing Haiti to rely on thermal generators and imported fossil fuels. Rehabilitation work to be performed at the plant includes the restoration of Peligre to its full capacity, with a scope of work that includes overhauling three turbines and modernizing the electromechanical equipment and control systems.

EDH will also work to upgrade power transmission lines between Peligre and Port-au-Prince using IDB grants totaling US$32 million.

International Finance Corporation agrees to buy PT Medco shares

The International Finance Corporation has agreed to buy an 11% share in PT Medco Power Indonesia.

The US$112 million equity investment will help the hydroelectric power producer expand its portfolio with five new plants and an additional 390 MW worth of power.

Currently, PT Medco relies exclusively on gas-powered plants for its production, according to the company’s website.

The deal was brokered by Saratoga Capital and includes an unspecified number of other investors.

Study shows Europe’s pumped-storage potential

A study conducted by the Joint Research Commission and University College Cork has produced a new method to identify Europe’s potential for pumped hydropower storage.

The JRC report, titled, “Pumped-hydro Energy Storage: Potential for Transformation from Single Dams,” says that pumped storage is the only large-scale option available to accommodate the EU’s 2020 renewable energy target. The JRC’s study proposes the conversion of conventional reservoirs into pumped-storage systems – an option JRC says offers “much smaller environmental and social impacts” than new hydropower plants.

The report also includes case studies for Croatia and Turkey.

According to the study, Croatia’s pumped-storage potential is more than three times its current generation of 20 GWh, while Turkey could produce as much as 3,800 GWh.

In one recent example of pumped-storage development activity going on in Europe, Scottish and Southern Energy Renewables is planning to construct a 600 MW pumped-storage facility.

SSE Renewables has asked the Scottish government to approve the US$1.26 billion project, but the company says it won’t reach a final decision about the facility’s construction until 2014.

If built, it would be the first new pumped-storage scheme to be developed in Great Britain since 1974, when work began on Wales’ Dinorwig project. It would also necessitate the construction of a new dam and upper reservoir at Loch a’ Choire Ghlais.

SSE Renewables says the project would take about five years to construct.

Voith signs finance deal with Chinese partners, gets Russia work

Financing worth RMB2.25 billion (US$354 million) should help the Voith Group further its hydroelectric presence in China, the company says, while it will also manufacture new turbines for a power station in Russia.

The China deal was coordinated by Citibank (China) and Voith Finance GmbH. Commerzbank and HSBC will act as further mandated lead arrangers, and ANZ, the Industrial and Commercial Bank of China and Standard Chartered Banks as original lenders.

Voith says the transaction represents the company’s first financing deal in the Chinese market.

“Against the background of a difficult environment, we were able to secure a flexible, long-term liquidity cushion at an early stage, and, at the same time, purposefully widen the circle of banks with which we cooperate,” said Voith Chief Financial Officer Hermann Jung.

Voith says it expects to invest more than $520 million in China in the next few years. The company also says it anticipates its Chinese workforce to increase from less than 3,000 to about 5,000 by 2016.

Voith also announced new work in Russia, saying it will manufacture six new Francis runners and related equipment for the 4,500 MW Bratsk station.

Each runner will have a diameter of 6 meters and a capacity of 255 MW.

The plant – on the Angara River – will supply electricity to the city of Bratsk.

Welsh water agency awards four contracts

Welsh water agency Dwr Cymru Cyfyngedig has awarded four contracts for hydro-electric generation services as part of its assessment management program.

DCC, also called Dwr Cymru Welsh Water, solicited companies to perform initial assessments, feasibility studies, detailed design, delivery, and installation of hydropower projects in April 2011 for facilities in England and Wales.

The companies awarded contracts are: Amalgamated Construction Limited, Carter Jonas LLP, Dulas Limited and Mott MacDonald Bentley. The contract award did not specify how much money each company would receive, but it is valued at US$7.9 million in total.

Nigeria vows to rehabilitate Kainji plant after leaks

Recent leaking at Nigeria’s Kainji hydro plant has led the government to shut the facility down indefinitely and reaffirm its commitment to rehabilitating and improving it.

The 44 year-old Kainji plant was shut down by Nigerian Minister of Power Bart Nnaji in late March after excessive water leakage was seen as a threat to the whole hydro station.

A government statement says, “To forestall the flooding, all five units in the power station … were shut down.” The statement also says divers have been deployed to determine the leak’s source, and that immediate attention is required to avoid disrupting operations at the nearby 330 MW Jebba Hydro Station.

Kainji was built in 1968 with an installed capacity of 760 MW. Its owner, Power Holding Company of Nigeria, says it hasn’t been overhauled in more than three decades and now provides a capacity of about 450 MW due to poor maintenance.

Leaks at Nigeria’s 760 MW Kainji plant have forced the government to shut it down until repairs can be made.

RusHydro proceeding with work on two plants

JSC RusHydro has signed a memorandum of cooperation with the government of the Krasnoyarsk Region to develop the greenfield Nizhne-Kureyskaya plant.

Construction of the 150 MW facility is planned in the Turukhansky region on the Kureyka River. RusHydro says it expects the project to cost more than US$99.5 million and that it is currently seeking project financing.

The memorandum establishes key parameters and details the terms of cooperation between the two entities. As per the memorandum, RusHydro’s participation is conditional on raising sufficient outside project financing and support from the local administration, while Krasnoyarsk will provide all necessary assistance for the project.

RusHydro says the first units could come online by 2018.

In other related news, RusHydro’s JSC Institute Hydroproject has begun designing a project of the 458 MW Kamskaya station, part of the Volga-Kama cascade in central Russia.

JSC Institute Hydroproject will develop the modernization plan with previous rehabilitation and reconstruction work taken into account. The company says 17 of the facility’s 23 units have already been upgraded.

“The main goal is to increase the hydropower plant’s safety and reliability, taking into account the latest technical requirements entered into after the accident at the Sayano-Shushenskaya plant,” chief project engineer Eduard Doroshenko said.Doroshenko anticipates the design work for the plant to be complete in 2014.

RusHydro is embarking on a modernization of the 458 MW Kamskaya plant, with reconstruction expected to be finished in 2014.

Hydropower projects eligible for Power Engineering Project of the Year

Conventional hydropower, hydrokinetic and ocean energy projects are among the renewable energy projects eligible for Power Engineering magazine’s Projects of the Year 2012 awards program. The deadline for entries for this program is August 31, 2012.

Power Engineering invites entries from renewables projects worldwide for the awards program. The program honors excellence in design, construction and engineering of power generation facilities.

The contest will make awards in up to four categories, including the best renewable energy project.

The editors of Power Engineering judge the entries. Winning projects will receive editorial recognition in Power Engineering. Awards will be presented at POWER-GEN International 2012, which is to take place December 11-13 in Orlando, Florida, in the USA.

Each project may recognize up to five suppliers or contractors, including the nominating company if this is not the project owner, that were instrumental in the project’s success.

Nominated projects must have begun service between August 1, 2011, and July 31, 2012.

Projects eligible for the award program include: new power plants; retrofit projects; re-powering projects; innovative use of technology; equipment upgrades; innovative diagnostic analysis and maintenance programs; and unique construction management and plant design programs.

Entries should be submitted to Sharryn Dotson, Online Editor, Power Engineering, PennWell Corporation, 1421 S. Sheridan Road, Tulsa, OK 74112 USA. Entry forms also can be submitted online at: For more information, contact Sharryn Dotson at (1) 918-832-9339; E-mail:

Consortium takes majority interest in Mexican hydropower provider

ACON Latin America Opportunities Fund has led a consortium of co-investors to secure a controlling stake in Hidrotenencias S.A.

ALAOF – an affiliate of ACON Investments LLC – heads the group, which also includes the Netherlands Development Finance Company and Societe de Promotion et de Participation pour la Cooperation Economique.

Hydropower developer Asergen S.C. has provided Hidrotenencias with technical and operational assistance, and the Woodbridge Group LLC acted as financial adviser.

Financial details of the transaction were not disclosed.

Hidrotenencias owns three 10 MW run-of-river plants in the Chiriqui province of western Panama. The first of these plants started operating in 2008, while the remaining two are expected to begin operations by the end of this year, according to ALAOF. Hidrotenencias also has identified further areas of growth within Panama and other nearby countries.

Equipment supply contract awarded for 98.5 MW Santa Teresa station in Peru

Luz del Sur has awarded a contract to Andritz Hydro to supply electromechanical equipment for 98.5 MW Santa Teresa in Peru.

The underground powerhouse, with a water head of 188 meters, will use the tailwater from the nearby 107 MW Machu Picchu hydro facility.

Located in the Urubamba Valley of the Cusco region, the scope of Andritz Hydro’s supply includes design engineering, delivery, installation and commissioning of two Francis turbines, governors, generators and protection and control systems. Commissioning of the Santa Teresa project is scheduled for mid-2014.

World Bank debars two Alstom groups and affiliates

Alstom Hydro France and Alstom Network Schweiz AG of Switzerland and their affiliates have been debarred by the World Bank Group for three years.

The debarment comes after Alstom acknowledged misconduct in relation to a World Bank-financed hydropower project, the Zambia Power Rehabilitation Project.

In 2002, Alstom made an improper payment of €110,000 (US$145,637) to an entity controlled by a former senior government official for consultancy services in relation to this project.

The Zambia Power Rehabilitation Project took effect in 1998 with an overall objective to enhance Zambia’s power system. The project includes rehabilitating hydro plants and distribution and transmission systems. Three hydro projects included in the project are 900 MW Kafue Gorge, 600 MW Kariba North Bank and 108 MW Victoria Falls.

The debarment is part of a negotiated resolution agreement between Alstom and the World Bank that also includes restitution totaling about US$9.5 million to be made by the two companies.

In addition, Alstom SA, the two named companies and their affiliates will commit to cooperating with the World Bank’s Integrity Vice Presidency and continuing to improve their internal compliance program.

The World Bank says the debarment of these two Alstom companies can be reduced to 21 months – with enhanced oversight – if the companies comply with all conditions of the agreement.

The debarment means Alstom Hydro France and Alstom Network Schweiz are considered cross-debarred by other multilateral development banks under 2010’s Agreement of Mutual Recognition of Debarments.

This agreement includes the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank Group and World Bank Group.

Alstom SA and other affiliates are conditionally non-debarred, the World Bank says.

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