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Symbion takes over Dowans power plant Purchase deal clinched at USD 120m

21st May 2011
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Dowans power plant

 

US-based energy firm Symbion Power yesterday concluded and signed a deal for full acquisition of the Dowans power plant that has lain idle at Ubungo Tanesco compound for quite some time.

“We are done…from now the plant will be called Symbion power plant and not Dowans,” Chief Executive Officer of Symbion Power, Paul Hinks told a press conference after the official conclusion of prolonged negotiations between the US firm and Dowans company on the purchase deal.

“Both parties have signed an agreement for the acquisition of the 120MW power plant. The property is ours,” said Hinks, alluding to the next stage of activating the plant to help ease the serious power crisis affecting the country.

Official announcement of conclusion of the deal and expected plan to switch on the plant is good news to the nation, which is currently enduring the pinch of extensive load-shedding prompted by the shutdown of Songo Songo gas processing plant for maintenance and drop in the water levels at strategic power stations due to poor rains.

The plant was purchased at the estimated cost of USD 120million, according to Symbion chief executive officer. He did not disclose the actual figure, but noted: “We bought it at a good price…it’s an extremely good deal.”

He explained: “Negotiations with the former owner (Dowans Company) have been challenging and as a consequence of past reports…we have undertaken due diligence. This due diligence also encompassed the thorough examination and testing of the equipment. The results have been positive; the plant has been well maintained.”

Symbion power experts, he said, are currently finalising a proposal on key aspects — a plan to switch on the plant, energy fees structure and other modalities of working with Tanzania Electric Supply Company (Tanesco).

Hinks said they expect to submit the proposal to Tanesco on Monday.” We will sit down and discuss it together including agreeing on energy fees which Tanesco will have to pay us for the electricity we will be selling to them.”

Declining to disclose actual energy fees proposed by Symbion, Hinks said: “In fact, the fees will be reasonable…almost close to the ones which had been charged by Dowans Company.”

Symbion also plans to embark on massive expansion of the plant, increasing the facility’s installed capacity by ten per cent--from 120 MW to 130 MW.

Symbion Power Chairman-Africa, Ambassador (rtd), Joseph Wilson said independent engineers recently tested the plant and confirmed that it was excellent and capable to produce power at short notice.

Symbion top officials said the firm has joined forces with ProEnergy Services, a US-based multi-national integrated service provider to the energy sector, which operates and maintains power plants on a global basis.

“ProEnergy Services has extensive aero-derivative gas turbine operation and maintenance experience, and will act as Symbion’s technical service partner,” said Wilson.

On Thursday, Permanent Secretary in the Energy and Minerals Ministry, David Jairo said the government would give full support to Symbion plan to switch on the plant, saying the move would bring great relief to the power crisis.

“We want electricity; we want development for our people. We will definitely support the initiative,” said Jairo in an exclusive interview with The Guardian.

In a brief statement, US Ambassador, Alfonso E. Lenhardt said yesterday: "We are pleased with the announcement that Symbion Power has decided to invest in Tanzania by acquiring a 112-megawatt power plant.”

He said energy was essential to support industry, agriculture, the education and health sectors, social services, and reliable water supply, noting that the private sector will have an important role to play in providing long-term energy solutions in Tanzania.”

He said the US government supports the Energy Ministry's efforts to attract investors and facilitate public-private partnerships, noting: “We encourage Tanzania to continue improving conditions for investment. The United States actively promotes investment by American companies in Tanzania."

SOURCE: THE GUARDIAN
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