Financing for the Bumbuna II project in Sierra Leone is progressing well, developer Joule Africa has announced, with the lenders expected to be in a position to go for credit approval early next year.
In its latest update, the company said the mandated lenders are nearing the end of their due diligence, with no major issues identified so far. Following credit approval, the negotiation of legal documentation and Financial Close are expected later in the year, once certain conditions are met.
Joule Africa said that the Development Bank of Southern Africa (DBSA), which initially supported the Project as a development capital provider, is now co-mandated lead arranger, together with the Emerging Africa Infrastructure Fund for the debt financing.
On the equity side, the company intends to bring in a strategic equity partner to the project in the lead up to Financial Close. This partner would share the remaining development costs up to Financial Close and provide up to half of the equity needed at that point.
Planning is also underway for Bumbuna II Community Development Action Plan
(CDAP). Alongside the Biodiversity Action Plan (BAP) and the Resettlement Plans (RAP), the company has been focusing on clarifying its strategy and programme of activities for the communities living in the wider catchment area around the project.
The CDAP is designed to support activities for the 25 years during which Seli Hydropower, Joule Africa’s project company in Sierra Leone, will be responsible for the operation of Bumbuna II. A week-long workshop was held in September 2019 where an action plan was drawn up. The team plan to conduct a comprehensive audit of the CDAP area in the near future. After that, the team will start to visit identified communities to discuss and agree options.
The company has also announced that it is getting ready to discuss commercial terms for the Kpep hydropower project in Cameroon, with good progress having been made this year with all technical field studies now completed. As a result of this progress, the Government of Cameroon is in the process of formally identifying Kpep as the next priority power project for the country, says Joule.
Commercial discussions between the Kpep team, the Government of Cameroon and ENEO (the state power utility) are scheduled to start in the next few months to agree a binding commercial framework and heads of terms for the Power Purchase Agreement and Government Concession. Once agreed, the company will start the remaining technical and environmental and social studies needed to launch the EPC tender.