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Construction Of US$45m Biomass Power Plant 75% Complete: Koreans

Anyone travelling along the Queens Highway between Suva and Nadi would be able to notice the progress of construction for the biomass power plant project in Nabou. Total construction is
01 Oct 2016 07:45
Construction Of US$45m Biomass Power Plant 75% Complete: Koreans

Anyone travelling along the Queens Highway between Suva and Nadi would be able to notice the progress of construction for the biomass power plant project in Nabou.

Total construction is now 75 per cent complete and is being undertaken by Nabou Green Energy Ltd (NGEL).

The company’s US$45 million (FJ$92 million) 12 Mega Watts biomass power plant project marked the practical completion of all construction framing works this week.

The project is scheduled for commercial operations by April next year.

NGEL chief executive, Lee Jun Hyung, explained this intriguing project to Fiji Sun.

“This project is the first independent power project (IPP) in Fiji. IPP true meaning is not linked to any other business but on its own,” explained Mr Lee.

“Upon signing the Power Purchase Agreement with FEA we assembled a consortium of investors from Korea and partnered with Tropik.”

This project is a joint venture between Korea and Fiji.

The shareholders of NGEL are GIMCO (a Korean biomass company), GS Power (another Korean energy company), Mirae Asset (of Daewood Securities) and Tropik Wood Industries Ltd. Tropik Wood has 25 per cent shares.

Mr Lee explained the plant will convert wood fiber and other waste to produce steam for power generation.

“The Fijian Government has established national energy policy. Against climate change the target is that all power produced in Fiji by 2030 should be through renewable energy sources,” he said.

“This means the current 40 per cent diesel consumption for producing electricity in Fiji should be replaced.

“Fiji will save on the billion dollars of import fuel bills that drain the foreign reserves if the Government’s objective is successful.

“However, it is important that private sector gets together to give meaning to government policies.

“For this reason we have assembled 4 shareholders who bring their respective strengths to this partnership.

“GIMCO and GS Power bring both construction and operating expertise in this energy sector.

“Tropik has the local know-how. And Mirae Asset has capacity on project financing and investment.

“We have to work hard as this is the first of such a project in Fiji.”

 

Risks and challenges

Mr Lee said there are many construction risks but they have ensured that such a large project is on schedule despite many challenges even from the cyclone and rain.

“We also had finance risks with local commercial banks despite Government policy that supports lending for renewable energy purposes, being hesitant to lend resulting in the entire funding to be brought from offshore for this project,” he said.

“Offshore funding is subject to exchange risks so local funding is ideal.

“Perhaps the local banks reluctance to lend is because this is the first such project and we hope for better response in future.

“There are many other challenges and risks. This type of project requires specialized skills and experience to successfully operate.

“So we are confident we have assembled the right team but we need to ensure continued support and partnership of all stakeholders for the long term and many years to come.

“If together we can address the challenges significant benefits will flow to the local communities and the Fijian economy.”

Mr Lee also thanked the support of the Fijian Government for this project.

 

Tropik contribution

Tropik Wood executive chairman, Faiz Khan, said: “ Tropik has not had a very good experience with its power generation for supplying power to its Drasa factory and exporting the excess to the grid.

“We have firsthand experience in understanding the importance of the specialised nature of these operations.

“The Koreans bring their expertise, experience and investment capacity. We hope to learn from them and at the same time build our capacity. We are also diversifying our portfolio of businesses.”

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