This article focuses on investors who back major power projects throughout in Africa. They are also working jointly with local businesses and governments to improve infrastructures and raise living standards. An African expansion project for CMS Generation involves acquiring and expanding the Takoradi natural gas-fired power plant near Aboadze, Ghana. CMS formed the Takoradi Power Company with the Volta River Authority as a 50-percent partner. CMS Energy’s third major African venture will extend its power generation business into chemical processing. AMPCO has awarded a $300 million engineering, procurement, and construction turnkey contract to Raytheon Engineers & Constructors, Lexington, MA, to construct the methanol plant on Bioko Island. The plant will use a proven, three-stage design. In the first stage, natural gas feedstock and steam are sent to a reformer and are exposed to elevated temperatures and pressure in the presence of a catalyst, forming synthetic gas made of carbon monoxide and hydrogen.
When President Clinton visited Africa in March, he urged U.S. businesses to increase their investments in Africa as a way to tap new markets and promote development. But even before the presidential visit, CMS Energy Corp. of Dearborn, Mich., was breaking ground for new projects. The engineering firm, which specializes in power generation, has been awarded multimillion dollar contracts to acquire and improve power systems in Morocco, Ghana, and Equatorial Guinea.
"Africa is an area largely forgotten by growth and development projects, yet its population is desperately in need of cheap, reliable power to improve health, safety, and the standard of living," said Rodney Boulanger, president and chief executive officer of CMS Generation Co., the independent power unit of CMS Energy.
United States companies that wish to succeed in Africa must be pioneers, Boulanger added, because there are often no precedents upon which to base major power projects. "For example, we undertook the first energy privatization projects in both Morocco and Ghana," he said. One key to unlocking African opportunities, Boulanger suggested, is seeking local partners and listening closely to their experiences.
By far the most significant CMS power project in Africa is the $1.5 billion privatization and expansion of the continent's largest independent power facility, the Jorf Lasfar coal-fueled power plant, located near Casablanca on Morocco's Atlantic Coast. "Jorf Lasfar forms a key part of Morocco's economic privatization plan and will provide an important contribution to the economic growth of the country," Boulanger said.
The financial arrangements of the Jorf Lasfar project are' more complex than any previous CMS project. CMS Generation formed a 50-50 joint venture with ABB Energy Ventures in Princeton, N.J., to complete the project. The joint venture closed $920 million of debt financing with a consortium of governmental, multilateral, and private financial institutions in Italy, Switzerland, and the United States. This allowed CMS/ ABB to possess and operate Jorf Lasfar's two existing generating units-two GEC Alsthom turbines equipped with coal-fired Babcock & Wilcox boilers producing 660 megawatts-as well as to finance the expansion. Remaining funds for the project include $395 million worth of equity from CMS Energy and ABB, and $190 million of reinvested capital from operations.
The two new coal-fueled turbines at Jorf Lasfar will be constructed by ABB SAE Sadelmi in Milan, Italy, and equipped with coal-fired boilers constructed by ABB Combustion Engineering in Windsor, Conn. ABB expects to complete the construction of Unit 3 at the Moroccan power plant by June 2000, while Unit 4 will be completed by December of the same year.
These additional units will more than double Jorf Lasfar's output to 1,356 megawatts and supply approximately 65 percent of Morocco's base load electrical demand. Altogether, the. units ' output will account for nearly one-third of the North American nation's total electricity supply. Power from the plant will be sold to the Moroccan national utility, Office National de l'Electricité, under a 30-year purchase agreement.
Largely forgotten by development projects, Africa’s population is in need of cheap, reliable power to improve the standard of living.
Another African expansion project for CMS Generation involves acquiring and expanding the Takoradi natural gas-fired power plant near Aboadze, Ghana. CMS formed the Takoradi Power Company with the Volta River Authority as a 50-percent partner.
VRA, based in Accra, the Ghanaian capital, is a quasigovernment agency, similar to the Tennessee Valley Authority in the United States. VRA is responsible for the generation and transmission of electric power in Ghana and for the distribution of power in the northern part of the country. An international player in its own right, VRA has supplied power to neighboring Togo and Benin since 1972, and has operated an interconnected system that includes the Ivory Coast since 1983. They originally signed an agreement to develop infrastructure projects with CMS in 1996.
VRA will contribute its skills and experience running the first Takoracli units, which are two dual-fueled Frame 9 General Electric turbines, nominally rated at 105 megawatts each. Stone & Webster provided the original engineering for Takoradi. CMS Generation and VRA are expanding the plant with two as-yet-to-be-chosen oil-fired turbines, which will produce an additional 330 megawatts. CMS Generation has already begun to procure additional natural gas supplies from Ghana, the Ivory Coast, and Nigeria. The engineering firm intends to build new natural gas pipelines to support the expansion of Takoradi and to foster local industries. The American firm will also promote a new, multinational, West African pipeline that will directly interconnec t Ghana with natural gas resources from the Ivory Coast to Nigeria.
CMS Energy's third major African venture will extend its power generation business into chemical processing. In 1997, CMS Energy formed a joint venture with Samedan Oil Corp., a subsidiary of Noble Affiliates Inc. in Ardmore, Okla., to form the Atlantic Methanol Production Co.
AMPCO will build a large-scale plant on Bioko Island in Equatorial Guinea. Existing process facilities on the island produce condensate and liquefied petroleum gas fuel from 'wet gas supplied by the offshore Alba field. The AMPCO plant will convert the natural gas leaving the existing process facilities into methanol.
"The methane gas was unusable, and previously flared. We decided to convert it into methanol, a transportable and salable base chemical used to make methyl tertiary butyl ether (an oxygenated gasoline additive), formaldehyde for resins, and other high-end chemical compounds," said Jim Cook, senior vice president of technology and development for CMS Energy.
AMPCO has awarded a $300 million engineering, procurement, and construction turnkey contract to Raytheon Engineers & Constructors of Lexington, Mass., to construct the methanol plant on Bioko Island. The plant will use a proven, three-stage design. In the first stage, natural gas feedstock and steam are sent to a reformer and are exposed to elevated temperatures and pressure in the presence of a catalyst, forming synthetic gas made of carbon monoxide and hydrogen. The synthetic gas is then compressed and sent to a converter column where, with the aid of a different catalyst, it becomes crude methanol, containing hydrocarbon impurities and about 20 percent water. This mixture is then distilled in third-stage fractionating towers to produce chemical-grade methanol.
When the Bioko Island plant is completed in early 2001, it will produce a minimum of 2,500 metric tons per day of methanol. In addition to the methanol plant itself, Raytheon will construct various support facilities, such as roads, docks, and associated plant utilities. The partners are also constructing a separate 10- megawatt power plant to meet the local power needs in Equatorial Guinea. The project will be fueled by the natural gas from the processing complex, and will contain two 5-megawatt turbines packaged by Stewart & Stevenson in Houston.
Cook praised the cooperation CMS has received from the Equatorial Guinean government, which has worked with the U.S. engineering firm to ensure that certain of the company's activities will directly benefit the local inhabitants. "Part of our obligation with the government involves training local personnel to develop the skills to fit some of the jobs at our facilities during both construction and operation," Cook said. "We have also put together social programs, including anti-mosquito spraying for malaria control and reading programs for the children, and the construction of a market in a remote town. You need to be a good corporate citizen, just as you would anywhere else."
Cook stressed that building and operating power plants in Africa hold pitfalls and promise similar to other regions. "The same investment formula we use anywhere, including the United States, holds true for our African projects: understanding •the benefits, risks, the business environment, the local culture and infrastructure, and management needs to develop a comfort level considering all of these variables."