Aggreko Mutundwe thermal plant project

distressed

In August 2007, the Government of Uganda procured Aggreko to implement a 50MW thermal plant at Mutundwe under a 3-year rental contract. This emergency power supply contract was supported by the World Bank. The award followed a competititve bidding process initiated in 2006. Four companies participated to the bidding process: Unatrac International, Jacobsen AS Elecktro, MFK Corporation and Aggreko International. The implementation agreement and the power purchase agreement were signed in January 2008 in Kampala. Under the agreement, the plant was expected to run for 18-hours daily under the power purchase agreement. The equipment for the contract was expected to be installed in phases and commissioned during the second quarter of 2008. The estimated investment for the rental power plants was determined by calculating an equivalent annual depreciation per MW and multiplying it by the number of years in the contract. We have used the following assumptions for this estimate: US$600 per kW as estimated investment, 15 years as expected asset life, and 10 percent as the annual discount (return) rate. Mutundwe power plant was shut down by Aggreko in November 2011 following financial disputes with the government. By 2012, the government had decommissioned the Mutundwe plant. Project in distress following a financial dispute between Aggreko plc and GoU. Plant shut down as a consequence in November. Plant decommissioned by March 2012.