Aggreko Signs 100 MW Power Plant and Fuel Supply Contract in
Tanzania
22 June 2011: Aggreko plc, the world leader in
the provision of temporary power plants and
temperature control services, has signed a contract with the
Tanzania Electric Supply Company
(TANESCO) to supply 100 MW of emergency power for twelve months.
The contract involves providing two 50 MW diesel power
plants at Ubungo and Tegeta, as well as managing the fuel
supply associated with the power generation.
The estimated value of the power plant contract
is $37 million; the pass-through fuel contract is similar to that
currently operated by Aggreko in Uganda and in previous years in
Sri Lanka, and involves managing the fuel supply to the
power plants. The value of the fuel contract will
depend on the monthly price of diesel, and the amount of power
generated; Aggreko will charge a small fee for managing the fuel
supply. The contract will become effective following the completion
of a number of conditions precedent, including the delivery of
bonds and guarantees customary for a contract of this type.
More than two-thirds of Tanzania’s electricity is hydro-powered;
the prolonged drought currently besetting East Africa has resulted
in a significant reduction in the amount of electricity being
generated by hydro plants. The reduced supply of electricity,
combined with the rapid growth of the Tanzanian economy and
consequent increase in demand for power, means that power rationing
has become a regular event.
The addition of 100 MW of power will help stabilise the
Tanzanian power supply and reduce load-shedding, and thereby
support continued economic growth while TANESCO works to implement
long-term solutions to improve power generation and
distribution.
Rupert Soames, Chief Executive of Aggreko, said: “Having
successfully delivered 40MW of emergency power between 2006 and
2008, we are delighted that, following a competitive tender
process, we have once again been selected to be of service to
Tanzania.” The award of this contract will take Aggreko’s order
intake in the first six months of 2011 to at least 630MW.