GUINEA is in talks with China International Water & Electric Corp to build a US$2 billion hydro-power dam that would almost double the West African country’s energy output, providing new capacity for the expansion of bauxite processing, said Lansana Fofana, an energy ministry official.
The 550MW Souapiti Dam would be CWE’s second project in the country, after it completed the 240MW Kaleta Dam about 120km north of the capital, Conakry, in July.
The Kaleta project tripled Guinea’s electricity production and boosted efforts to expand grid access to more of the country’s 12 million citizens.
\n“The idea is to feed the mining industry,” Fofana, the head of the two hydro-power projects, said in an interview this month during an inspection of the 1 545m long Kaleta Dam.
“We want to build refineries for our bauxite. We will even be able to position ourselves as an energy exporter.”
\nFofana’s deputy, Jiahua Liu, who is also CWE’s senior-most official at Kaleta, said in the interview that the Chinese company is interested in the Souapiti project.
It’s up to the government to decide who builds it, he said.
\nGuinea has the world’s biggest reserves of bauxite, which is refined into alumina and then smelted into aluminium, and its mines are the backbone of the US$6,6 billion economy.
Souapiti will be built on the Konkoure River, about 2km upstream from Kaleta, with a reservoir big enough for both plants to function even when the river loses most of its flow during the six-month dry season.
\nExport-Import Bank of China has shown interest in financing Souapiti, according to Fofana.
\nIt loaned three-quarters of the US$526 million needed to build Kaleta, with Guinea’s government paying the rest.
\nThe project took three years to complete, during a time when an outbreak of Ebola killed 2 530 people in Guinea and delayed mining and other infrastructure investments.
“We’re in talks with Exim Bank and CWE,” Fofana said. We’re looking for other investors. We’re open to the world.”
\nThe government will probably pursue plans for a plant able to generate 550 megawatts, out of the three options under consideration, Fofana said.
The biggest-capacity proposal would result in a flood plain requiring more than 15 000 people to be resettled, he said.
\nEven so, with World Bank data showing that only a quarter of Guineans have access to the national grid, Fofana said it will take as long as 20 years until the entire country is connected.
\n“In the next five years, the goal is to buy the energy independence of the country,” Gabriel Curtis, the head of Guinea’s Private Investment Promotion Agency, said in an interview in Conakry. “Right after the elections, that’s going to be one of the first priorities.”
\nPresident Alpha Conde, who is standing for a second term in October 11 elections, has made Kaleta a milestone of his presidency and has built an official residence next to it.
He also promoted Fofana’s predecessor, Cheikh Taliby Sylla, to energy minister in October.
\n“The Kaleta Dam has undoubtedly boosted President Alpha Conde’s bid for re-election and raised confidence among foreign investors that the government can put the infrastructure in place for the large-scale exploitation of Guinea’s mineral resources,” Bloomberg Intelligence economist Mark Bohlund said in an interview from London.
The upbeat sentiment comes as miners look for ways to reduce costs amid a slump in commodity prices.
\nThe country’s mineral wealth also includes high-grade iron-ore deposits, such as Rio Tinto Private Limited Company’s untapped Simandou deposit.
“With iron-ore prices sharply lower compared to a few years ago, the importance of cost efficiency has risen substantially,” said Bohlund. — Bloomberg