Dhanoa to acquire majority stake of desalination project in Guinea
Dhanoa Minerals has signed a letter of intent (LOI) with Vision Energy Corp to acquire a majority stake in a desalination plant in the Republic of Guinea in West Africa.
Vision Energy has agreed to sell 75% its share of the desalination project, including rights, entitlements and benefits. The LOI calls for US-based CC Gas Systems to be the construction contractor and permanent plant operator.
Under the agreement, Sofitrad will provide the $20m funding guarantee for the project. Sofitrad will also oversee the construction and operation of the facility, which will produce five million gallons a day of potable fresh water from seawater.
The deal also requires Sofitrad to be responsible for the take or pay contract for the entire plant production.
It is expected that the annual net profit for a full year of operation at the plant will be around $10.5m after operating costs, maintenance, debt service and taxes. Vision Energy and Congo-based Sofitrad will share the net profits from the operation of the desalination plant equally.
Dhanoa Minerals's 75% share of Vision Energy's portion of that annual yield is estimated to be around $3.9m. Dhanoa Minerals and Vision Energy still own 100% of the equity in the plant and licence.
Dhanoa is a production stage company formed to acquire and develop natural resource properties. The company has initiated a new programme to evaluate undervalued assets, including clean tech and alternative energy investments for the potential addition to its portfolio.