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Veolia’s management contract with Electricité de Guinée (EdG) revives hopes for an end to the power supply problems that have dogged Guinea for decades. But in the process, the French company will have to tackle one of the country’s biggest systems of fraud and embezzlement.President Alpha Condé, who makes no secret of his lack of confidence in Guineans’ ability to manage strategic sectors, was closely involved in negotiation of the contract, whose success is important both for energy-starved Guineans and for his chances of re-election in October

A World Bank-backed management services contract awarded to Veolia in Guinea represents a new model for running utilities, the French water and electricity giant’s chairman and chief executive for Africa and the Middle East Patrice Fonlladosa has told African Energy. Under a contract drafted with the International Finance Corporation (IFC), senior Veolia executives will take over national utility Electricité de Guinée (EdG)’s management. Although Veolia intends to work closely with local staff, “ultimate responsibility for decisions at EdG will rest with the nominated manager”, Fonlladosa said on 6 July: “This is quite unique. I have never experienced it in Africa.”

The government has signed a four-year contract worth €11.3m ($12.6m) with Veolia Africa to provide management services to national utility Electricité de Guinée (EdG). Veolia Africa will be supported by experts from another Veolia subsidiary, consulting engineer Seureca, the French company told African Energy. The consortium will work to improve the management of facilities and the efficiency of the energy distribution network while overseeing the expansion of the grid. Emphasis will be placed on customer relationship management, human resource management, procurement and inventory management, technical performance and better planning of operations and maintenance activities.

The US Department of Justice (DoJ) has closed its investigation into Hyperdynamics Corporation concerning possible violations of the Foreign Corrupt Practices Act. “Based upon the information known to the department at this time we have closed our inquiry into this matter. If we obtain additional information or evidence in the future regarding this matter, we may reopen our inquiry,” the DoJ said in a letter to the company’s lawyers. The DoJ issued a subpoena in September 2013 asking Hyperdynamics to produce documents relating to its activities in Guinea.

A company replacing Aggreko to provide 135MW of temporary power is linked to a local businessman and not to US interests as officials originally indicated (AE 296/8). A source at the energy ministry told African Energy that K Energy SA was registered by the businessman and honorary consul of South Korea in Guinea, Ibrahima Kassus Dioubaté. K Energy was established on 27 May 2014 and registered at investment agency Agence de Promotion des Investissements Privés on 28 May 2014. “Kassus has strong support within the presidency. He has been received several times by President Alpha Condé himself. It is he who introduced the company here, inspired by the Aggreko model,” one official told African Energy.

Guinea is close to commissioning the 240MW Kaleta dam on the Konkouré River, which will more than double its installed capacity while boosting supply to the regional grid. “A number of energy projects are under way. We will launch Kaleta in May-June and August, and we are about to launch feasibility studies for the Souapiti dam with the help of the World Bank,” minister of state for economy and finance Mohamed Diaré told African Energy in an interview.

US power developer Endeavor Energy and Mauritania’s Energie, Environnement et Mines (E2M) have signed a joint development agreement to rehabilitate the 24MW Tombo 1 and 26MW Tombo 2 power plants in Conakry, as well as building a temporary 50MW greenfield project. Endeavor said in a 20 November statement that the partners would develop, finance, construct, own and operate the temporary plant until the government can “implement more permanent solutions”, and refurbish and/or complete construction of, finance and operate the Tombo heavy fuel oil plants for a set duration, thenhand them back to the government.

Minerals and other commodities sales have driven economic growth and inward investment in the Mano River Union (MRU) countries, as post-conflict Guinea, Liberia and Sierra Leone (and newer MRU member Côte d’Ivoire) have enjoyed the dividends of stability. Improved politics have raised the prospects for ‘transformational’ electricity interconnections across a long-underdeveloped region, and for offshore oil finds as investors move into polities too long submerged in militia conflicts and warlord economics. Basic services remain far from adequate but, as a work in progress, the MRU countries have delivered a generally positive story of Africa re-emergent.

Moribund Guinea licenceholder Hyperdynamics has announced the resignation of former UK foreign secretary Lord Owen from its board of directors. Lord Owen joined in September 2009 as the company sought to remake itself under new president and chief executive officer Ray Leonard.

Beleaguered state utility Electricité de Guinée (EDG) has announced the renewal of its 50MW emergency power contract with Aggreko, which accounted for a massive 36% of EDG’s total expenditure in H1 2014. The utility’s half-year results, released in late August, show that investment in generation, transmission and distribution infrastructure received only 4% of total H1 2014 spending. According to EDG, in H1 2014 it was able to offer some 350GWh of energy, some 25% of which was purchased from Aggreko, against estimated demand of 797GWh, representing a coverage rate of 44%. Aggreko’s contribution during the six-month period was 88,631MWh, providing a lifeline to the capital, Conakry, which suffers regular power outages, particularly in outlying areas.

The Democratic Republic of Congo and Guinea have both been admitted as full members of the Extractive Industries Transparency Initiative (EITI) at an EITI board meeting in Mexico City. “I congratulate the DRC for becoming a full member of the EITI family. Despite all the challenges facing the country, the Congolese people have been working together to bring transparency and accountability to the management of their natural resources,” said EITI board chair Clare Short. DRC’s candidate status was temporarily suspended on 18 April 2013, following the publication of the 2010 EITI Report, which was found to not meet the EITI requirements. The country has since addressed the issues that led to its suspension, an EITI statement said.

Rio Tinto, Aluminium Corporation of China (Chinalco) and the World Bank’s International Finance Corporation have signed an investment framework with the government of Guinea to develop blocks 3 and 4 of the Simandou iron ore deposit, creating the largest combined iron ore and infrastructure project in Africa. A joint statement said the signing provided the legal and commercial foundation for the project. The investment framework will now be presented to parliament for ratification. Once it is ratified, the project partners will finalise a bankable feasibility study to confirm all the project parameters, including cost and timeline.

Hyperdynamics and AGR Well Management have reached a settlement in their dispute over cost overruns for the Sabu well offshore Guinea, three weeks before the case was due to open in London. AGR provided project management services for Hyperdynamics’ subsidiary SCS Corporation for the well in 2011-12. Under the settlement, SCS will receive $17.7m from an escrow account previously established by the companies. The net proceeds to SCS will be $15.6m after reconciliation of a joint interest account with block partner Dana Petroleum.

Tullow has lifted its declaration of force majeure over its Guinea acreage. The declaration was linked to an investigation of potential violations of the US Foreign Corrupt Practices Act by Tullow’s partner Hyperdynamics, the original holder of the concession. “Diligent efforts are being made to satisfy the conditions to resuming petroleum operations which include clarification that the US FCPA investigations of Hyperdynamics will not adversely affect Tullow’s operations under the PSC,” the US company said. Industry sources had questioned the grounds for a force majeure declaration and linked the move to Tullow’s desire to cut exploration spending.

Israeli diamond magnate Beny Steinmetz’s BSG Resources (BSGR) is preparing arbitration proceedings against the government of Guinea and President Alpha Condé, after Conakry revoked its licence for the Simandou iron ore deposit. BSGR said in a statement that it was initiating arbitration with the International Centre for Settlement of Investment Disputes. Guinea stripped BSGR and its joint venture partner Vale of their rights to part of Simandou in April after a government committee concluded that BSGR had paid bribes. BSGR has denied any wrongdoing.