Geita Mine 60 MW Power Station
K&M advised Ashanti Goldfields, Ltd on the due diligence of a 60 MW facility in the Geita region of Tanzania to support new mining operations that Ashanti planned in the region. The project included a potential small distribution network that could include sales to other surrounding mines in the region that were self-generating. This project was a first of its kind for Tanzania given its size compared to total install generation and its planned interaction with the national grid. K&M’s due diligence included the regulatory regime, electricity market, plant siting, fuel supply and transportation, and accessibility to the national transmission grid.
K&M was engaged by CDC Globeleq to conduct technical and commercial due diligence on a fast-track basis. K&M evaluated the following six power plants totaling 1,976 MW of capacity: the Haripur 360 MW CCGT IPP, the Meghnaghat 450 MW CCGT IPP, the Kelanitissa 163 MW diesel-fired combined cycle IPP, the Kelvin 600 MW coal-fired IPP, the Songas Ubungo 113 MW CCGT IPP, and the Ebute 290 MW gas-fired open cycle barge IPP. For each power plant, K&M evaluated technical performance, commercial arrangements, operations and maintenance (O&M) arrangements, plant management, regulatory structures, and the plant’s environmental profile. To support the technical due diligence, K&M engineers interviewed plant staff and conducted site inspections to evaluate the physical conditions of each plant. K&M reviewed all major contracts for each plant, including PPAs, fuel supply agreements, and O&M contracts, and K&M analyzed risks which could impact future operations and cash flows to investors. K&M also estimated the remaining useful life of each asset.
K&M was engaged by the AIG African Infrastructure Fund (AAIF), an affiliate of the Emerging Markets Partnership (EMP), to conduct a full technical and commercial due diligence of the Songas Ubungo 113 MW power plant in Dar es Salaam, Tanzania. The plant was in the process of a restoration effort which would allow all four gas turbines to produce electricity using natural gas from the offshore Songo-Songo field. K&M had previously performed due diligence of the plant for CDC Globeleq in 2002, and used this work as a basis for producing an updated due diligence report. K&M assessed the performance of the EPC contractor performing the expansion work and evaluated the plant’s forecast technical and commercial performance. For the commercial due diligence, K&M also evaluated Tanzania’s electricity market, reviewed the plant’s contractual arrangements, and identified any major operational risks which could impact shareholder value. K&M’s revised due diligence report included the results of K&M’s on-site engineering inspection of the facility and interviews with plant staff.
K&M served as the Lead Transaction Advisor to TANESCO for the procurement of the Somanga-Fungu 250 MW CCGT power plant as a Public Private Partnership (PPP) using an Independent Power Producer (IPP) arrangement. K&M was responsible for leading and implementing all phases of the transaction on behalf of TANESCO which included a project feasibility study.
K&M conducted the project feasibility study, including technical and commercial viability assessments. Following the feasibility study, K&M evaluated siting and technology options as well as procurement options, performed economic and financial analysis, conducted initial environmental screening of the project, selected the best procurement option, and determined the optimal risk allocation structure. K&M conducted a market sounding with potential investors, prepared the Request for Qualifications document, and conducted training on IPP development for TANESCO management. The project did not go into procurement stage due to a change in political climate in Tanzania.