May 30, 2008

Energem announces investment in African dam

VANCOUVER

Energem Resources Inc. has announced a memorandum of understanding to take a 40 per cent interest in the proposed 900-megawatt Stieglers Gorge hydroelectric development in Tanzania.

Energem said it will advance a US$1.2-million short-term loan to Infrastructural Development Finance (Pty) Ltd., to be used to update engineering and feasibility studies done in the 1980s.

The concept was shelved then, but Energem said regional electricity demand now warrants another look at the development, which might cost $2 billion and take five years to complete.

Privately held Infrastructural Development Finance has been granted rights to the project on the Rufiji river in the Selous game reserve.

However, “the rights to the project are at all times subject to Tanzanian legal regimes and regulatory process,” noted Energem, which would seek to assist in management, financing and logistical support.

“Based on a recent review of the information available from the historic feasibility,” the Toronto-listed, Africa-focused company stated, “the construction of a dam has a limited environmental impact, is expected to use only a minor fraction of the area of the game reserve, requires no resettlement of local communities and can provide substantial downstream irrigation and flood-control benefit,” the company said.

Canadian Press

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