Houston-based Endeavor Energy, an independent power development and generation company backed by US private equity firm Denham Capital, has entered into an agreement with international power developer Joule Africa to jointly develop the Bumbuna Phase II Power project, a hydroelectric power (HEP) plant in Sierra Leone.
The project will add an additional 202 megawatts (MW) to the existing 50MW at Bumbuna HEP, Endeavor Energy said in a statement on Wednesday.
The Houston-based company will fund the remaining development costs for the project and will invest up to 75 percent of the equity at financial close, estimated at $150 million.
Joule Africa, which focuses on renewable energy projects in Africa, has completed the feasibility study for the development of Phase II, while the two companies are preparing to launch an engineering, procurement, and construction (EPC) tender.
“We are […] delighted by the short list of EPC contractors to which we will be launching, as the project promises to be a landmark development for Sierra Leone and the sub region,” Joule Africa chief executive Andrew Cavaghan said. A specific launch date for the tender was not provided.
“We are pleased to have teamed up with Joule Africa and the Government of Sierra Leone to jointly complete the expansion of the Bumbuna Phase II in a public private partnership,” said Sean Long, Endeavor Energy’s chief executive.
The African Development Bank, IFC, and Emerging Markets Infrastructure Fund, as well as a club of European development finance institutions are expected to provide loans for the project, according to the statement.
Boston-based Denham Capital is a global private equity firm focusing on the energy sector. It formed Endeavor Energy in June providing seed money of $100 million from its $3 billion Fund IV, which it raised in 2012. The new company will invest in thermal and hydroelectric power projects in Africa, according to its website.
Denham Capital has $7.3 billion in invested and committed funds in the oil and gas, power and renewables and metals and minerals industries. From its offices in London, Boston, Houston, São Paulo and Perth, Denham Capital invests globally, with current investments in Africa, the Middle East, the US, Canada, South America, Australia, Europe and Asia.