Last week Wednesday, Alstom signed a technical co-operation deal with Talveras Group Limited and the agreement is for supplies and services for the rehabilitation and capacity of the Afam power station.
“To us, Alstom is a brand that we recognise to be environmentally friendly, they give you the best return on carbon credits. As far as I know, they consume less gas and they also make very reliable machines,” Oghens Sanomi, CFO Talaveras group told CNBC Africa.
“We looked at Afam, it needed care, it was sitting on good gas supply, and it has very good evacuation meaning the transmission network is robust. We felt it was an asset to own.”
After the 200 million US dollar acquisition, Sanomi believes that once they’ve taken psychical possession of the station, they need to bring the plant up to 420 megawatts within 14 to 16 months.
“Our target is when we get to 700 megawatts between the first 18 to 24 months, we will now start the expansion of the Afam independent power plant. We are planning on doing an addition of 500 megawatts, so, in store capacity, will be 1200 megawatts within four years.”
“The first phase will be about 100 million to 110 million US dollars. The second phase will be similar and then for the expansion phase, I won’t like to put a number on it now because we are going to have long term service agreements and things that can help us bargain to get the new expansion products a bit cheaper,” said Sanomi.
With the growing need for infrastructure in the country, especially the power infrastructure, Sanomi is certain that funding this project won’t be an issue.
“The banks are ready, the country is ready, there’s a need for power and there’s lack of supply. With these dynamics in place, we know that there will be funding for these projects to come in.”
While gas has been the biggest challenge for many investors in the power sector, for the Talaveras group, this is not a significant challenge.
“To us I believe the biggest challenge is, making sure we get the credibility of the vendors, making sure that the regulator keeps to its own bargain because that’s what drives investors in the private sector. They need to know that the rules of the games don’t change,” said Sanomi.