Buchanan Renewables (BR) on Wednesday announced that an agreement has been reached for its sale. This includes its entire ownership interest in its Liberian operations to an investor group.
Although the name of the new group is yet to be disclosed, the sale of the company includes all the assets of the fuel business and the plans for the local biomass power plant.
While the terms of the deal were not disclosed, the company said it remains hopeful that with the support of the Liberian Government and the LEC, it can make the power plant a reality.
The Chief Executive Officer of BR Liam Hickey confirmed the sale of the company and said the new investor group is expected to take over by next week.
It is still not clear as to what led to the sale of the company but the CEO said the company and its new owners will provide further information once the details are available.
This is the second sale of a multi-million dollar company barely a week after the Israeli company, Elenilto sold its remaining share to India's Sesa Goa.
It can be recalled sometimes ago Buchanan Renewables BV disclosed plans for the construction of 21 Milo kilowatts Power Plant in Margibi County. The company said that the building of the power plant is aimed at addressing problems Liberia is faced with in the provision of electricity after years of brutal civil crisis.
Buchanan Renewables announced in 2009 that it planned to help Liberia's power sector by using woodchips from old rubber trees to generate 35 MW of electricity but some people claimed that the company was only exploiting the country's resources to export to Europe.
In November 2008, Buchanan Renewables' Liberian subsidiary, Buchanan Renewables (Monrovia) Power, Inc., received approval for a $112-million loan to help build a 50-MW independent biomass power project.
The BR Public relations Officer, Momolu Vannie told Alternative Energy Africa that the US$112 million loan was granted for the construction of the power plant, but the money would not be disbursed until the concessional agreements is approved by the government.
Vannie said: "Please note that while the export of woodchips to European or other markets has always been one of BR Fuel's business activities, the priority for the overall group has always been to use the biomass locally to provide an affordable, reliable, and sustainable source of power in Liberia. However, this can only be done once the plant is constructed, which is contingent on the finalization of negotiations with the Government of Liberia."
The Buchanan Renewables (BR) Group was formed in April 2008 after Pamoja Capital acquired Buchanan Energies and its sister companies. The group has two main sectors: BR Fuel and BR Power, which are legally registered companies in Liberia with separate CEOs among other business activities.
BR Power entered into a concession agreement and PPA with the Liberian government in March 2009 for the construction and operation of a 36-MW biomass power plant.
The company said that it has been ready to begin construction of the plant in line with the concession agreement since 2009.
The company said, "To date, BR Power has spent over $20 million on engineering consultants, land leases, legal fees, etc. in preparation for the construction of the plant." It went on to say: "BR Power remains committed to working with the government, LEC, and OPIC to resolve outstanding issues in order to start construction of the plant and fulfill the social obligations of its concession agreement.
In January 2009, Buchanan Renewables Power (BR Power) entered into a concession agreement and power purchase agreement with the Government of Liberia to construct and operate a 36 MW biomass fueled power plant in Liberia.
The concession agreement was ratified by the Liberian Legislature in March 2009, which gave it the force of law.
During finalization of the auxiliary documents that detail the provisions of the concession and power purchase agreements, the Government of Liberia and the Liberia Electricity Corporation (LEC) decided that key terms agreed upon previously were unacceptable. The initial concern was the price at which BR Power would sell power to LEC.
Prior to its sale, the company made no significant progress especially in the area of electricity in Liberia except the exportation of its rubber chips to Europe.
Expectations of Liberians are still high on the deliverables of the new investor group as to whether or not it will comply with the early agreement signed between the government and BR.