November 4, 2014 / 9:37 AM / 4 years ago

Dangote Cement seeks licence for 75 MW power plant in Tanzania

* Nigerian firm investing $500 mln in new cement factory

* Seeks to build coal-fired station to power new plant

* Part of firm’s plan to expand across Africa

DAR ES SALAAM, Nov 4 (Reuters) - Nigeria’s Dangote Cement has applied for a licence to build a 75 megawatt coal-fired plant in Tanzania that would power a $500 million cement factory now under construction, Tanzania’s energy watchdog said.

Sub-Saharan Africa’s leading cement producer plans to roll out plants across Africa to reach an annual capacity of 62 million tonnes by 2017, up from a projected 42 million tonnes this year.

But any corporate expansion plan in Africa must contend with power shortages, which are common across the continent. Businesses often complain that poor or erratic supplies deter investors and push up costs.

“Dangote Industries ... applied for a 75 MW electricity generation licence to build, own and operate a coal-based captive power plant adjacent to its cement manufacturing plant,” the state-run Energy and Water Utilities Regulatory Authority (EWURA) said in a statement on Tuesday.

All the electricity would be “used to run the plant and machinery for the manufacture of cement, utilities and housing colony”, EWURA said.

“Any interruption in power supply or unstable voltage/frequency causes extensive damage to the refractory and also to the rotary kiln parts. Refractory failures cause production shutdowns varying from 15 to 30 days and unscheduled use of costly imported refractory bricks,” the regulator added.

Dangote Cement, owned by Africa’s richest man Aliko Dangote, already operates in 13 African countries and posted $2.45 billion in revenue last year.

The factory it is constructing in southern Tanzania is scheduled to be commissioned in the second half of next year. With an annual capacity of 3 million tonnes, it will supply Tanzania’s domestic market and export to landlocked nations in the region.

Cement makers in east Africa’s second-biggest economy include Tanzania Portland Cement, which 69.3 percent owned by a subsidiary of Germany’s Heidelberg Cement AG ; Tanga Cement, which is 62.5 percent owned by Afrisam Mauritius Investment Holdings Limited; and Mbeya Cement, 62.76 percent owned by France’s Lafarge SA. (Reporting by Fumbuka Ng’wanakilala; editing by Drazen Jorgic and Jane Baird)

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