JOHANNESBURG (miningweekly.com) – Aim-listed Bushveld Minerals’ coal and energy subsidiary Lemur has secured a power purchase agreement (PPA) with Madagascar State-owned utility Jiro sy Rano Malagasy (Jirama).
Lemur is developing the Imaloto power project, an integrated thermal coal mining and independent power producer (IPP) asset in Madagascar.
“The signing of the PPA with Jirama achieves a critical milestone in the development of Lemur’s integrated coal-to-power project,” said Bushveld CEO Fortune Mojapelo.
The government entity-backed anchor 30-year offtake, starting in 2021 post construction, not only opens Lemur to further opportunities with several private consumer PPAs, but brings the project closer to implementation.
Madagascar dictates that a PPA with a national utility is an essential prerequisite for the granting of a generation licence or concession and subsequent development of an IPP project.
Together with the ongoing progress on the project’s bankable feasibility study, which is on track for completion in the first half of 2018, this achievement adds significant value to the project.
Jirama’s offtake will start with the supply of an initial 10 MW of the nameplate 60 MW capacity, increasing as demand rises.
In the interim, Lemur had identified numerous communities and industrial users between the Imaloto power plant site and Tulear that will need an additional 30 MW of generation capacity.
“Negotiations are already in process for offtake agreements with these users,” Mojapelo said.
Supply from the Imaloto project would help reduce Jirama's exposure to the volatility of imported fuels, said Jirama CEO Olivier Jaomiary.
“In the long run, we believe it will help Madagascar increase its generation capacity while providing a source of affordable electricity to end-users. Overall, we expect the project to help bring about economic development and create employment in Madagascar,” he said.
It is expected that the project will provide significant developmental benefits to the region and over $1-billion in new fiscal revenue to the country over its lifetime.