RusHydro signs a contract for management and modernization of 1.3 GW hydropower capacity in Nigeria
JSC RusHydro (ticker symbol: MICEX-RTS, LSE: HYDR; OTCQX: RSHYY) announces that it has received the first payment under agreement between RusHydro International AG (subsidiary of RusHydro), and Mainstream Energy Solutions Ltd (Mainstream Energy) of Nigeria, for management services in regard of two hydropower plants in Nigeria. The service agreement is signed for five years with potential extension. RusHydro will not provide any financing for the project.
In September 2012, a consortium of Mainstream and RusHydro International AG won a tender to enter a concession agreement for operating two hydropower plants in Nigeria. The concession agreement between Mainstream and Nigerian government was signed on February 21, 2013.
Both power plants – Kainji and Jebba – are located on the Niger river, and have installed capacity of 760 MW and 578 MW, respectively. Currently available capacity of the plants is substantially below their installed capacity. The concession conditions provide for modernization of the power plants and increase of their available capacity.
RusHydro International A.G. is responsible for technical management and management of plant modernization. The company will manage the plants’ operations to maximize their capacity utilization and will also organize tenders for engineering and construction services within modernization of the plants, as well as supervise the contractors’ work.
Mainstream Energy has committed to spend USD 452 mn for modernization of the plants during the first five years of the concession. RusHydro will not provide any financing for the project. Mainstream Energy will pay a fixed fee to RusHydro International A.G. for rendered services, and additional remuneration for organization of tenders.
George Rizhinashvili, Deputy Chairman of the Management Board of RusHydro, commented: “Nigeria is a dynamic and a very promising market. We are excited to manage such important project. Providing management and engineering services allows us to leverage our expertise without committing financial resources. We are interested in doing similar projects in other markets”.
The information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of RusHydro. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might," the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially from these statements. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to RusHydro and its operations.
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