Investment by FMO broadens ownership of Tanzanian power project
HOUSTON, 16 February 2004 – CDC Globeleq, the emerging markets power company, today announced that FMO, the Dutch Development Finance Company, has purchased 82% of the Preferred B shares in the Songas natural gas processing, transportation and power generation project in Tanzania. This US$14.4 million transaction broadens the ownership structure of the Songas project, bringing new investment to Tanzania. FMO supports the private sector in developing countries through loans, participations, guarantees and other investment promotion activities.
Commenting on the transaction, Paul Kunert, VP East Africa for CDC Globeleq and Managing Director of Songas, said “We are pleased to welcome FMO to the Songas project. Their investment is a vote of confidence both in Songas and in Tanzania.”
CDC Globeleq acquired Songas in April 2003. It operates the project and owns 100% of the Preferred A Shares and 54% of the Common Shares.
The Songas project is developing Tanzania’s gas and electricity sectors by converting local natural gas to clean, reliable electric power. Upon completion, targeted for June 2004, Songas will supply 20% of Tanzania’s current electricity demand, supplying power to Dar es Salaam and the Tanzanian national grid.
The Songas project comprises a gas processing plant on Songo Songo Island; a 225 km/140 mile pipeline from the island to Dar es Salaam; and the 112 megawatt (MW) Ubungo power station in Dar es Salaam. The pipeline will also supply gas directly to industrial and commercial customers.
CDC Globeleq and the Songas project company have worked closely with the Tanzanian Government and the principal project lenders, the World Bank and the European Investment Bank (EIB). The other shareholders in Songas are Tanzanian Development Finance Limited, the Tanzanian Petroleum Development Corporation and TANESCO, the Tanzanian distribution company.
In Africa, CDC Globeleq has investments in Kenya, Cote d’Ivoire, Tanzania and South Africa, where it owns and is refurbishing the 600 MW Kelvin power plant in Johannesburg. CDC Globeleq Africa is expanding operations in East and South Africa, and is seeking acquisitions in both North and West Africa.
CDC Globeleq has a portfolio of power generation and distribution assets with a net capacity of over 2,300 megawatts in the emerging markets of Africa, Asia and the Americas and is actively engaged in acquiring additional assets. The company’s management team has a wealth of experience in developing and operating power assets in emerging markets.
