RED.L Regulatory News (RED)

21 March 2012

Camco International Limited

('Camco')

Camco and Rex awarded Tender for Largest Solar Installation Programme in Tanzania

Companies form joint venture to bring renewable energy to rural Tanzania through the Millennium Challenge Corporation

·; Camco and Rex have been awarded a USD $4.7 m contract to bring solar power to off-grid communities in rural Tanzania

·; JV recognized as bidder with specialised capability to offer the required expertise set

·; Project beneficiaries include schools, health centres and households

Camco International Limited (AIM: CAO), a global developer of clean energy projects and solutions to reduce greenhouse gas emissions and Rex Investment Ltd (RIL), a leading solar contractor based in Tanzania, are pleased to announce that their recently formed joint venture has won a tender, worth USD $4.7m, to distribute and install solar power systems in the rural Kigoma region of Tanzania.

The contract was awarded by the Millennium Challenge Corporation (MCC), a US foreign aid agency which operates in Tanzania as the Millennium Challenge Account - Tanzania (MCA-T). The Kigoma solar project is the largest of its type in Tanzania's history and will involve the installation of solar power at 45 secondary schools, 10 health centres, 120 dispensaries, municipal buildings and businesses across 25 village market centres currently without access to the electricity grid.

As part of the project Camco will also work to encourage households in the region to install small-scale solar home systems (SHS) by advising communities on the collective purchase and installation of systems in bulk, thereby achieving significant economies of scale. This mechanism, known as the 'PV Clusters' project format, is already being implemented by Camco in rural communities across the Lake Victoria region of Tanzania, announced in September last year.

Camco and RIL were successful in a public bid, emerging as the only bidder that combined the required forte in importing and distributing solar equipment. Rex is Tanzania's leading solar contractor and Camco is the market leader in rolling out solar home systems across Tanzania.

The contract, which is due to commence in May 2012 has a value to Camco of USD $1.1 million over its duration and attaches to the company no upfront cost. The remaining USD $3.6 million will be received by RIL and includes provision for the upfront equipment procurement costs linked to the contract.

Currently only 15% of Tanzania's population has access to electricity according to the country's Ministry of Energy and Minerals. Tanzania ranks amongst the world's top ten countries for solar irradiation and small-scale solar power installations of the type promoted under the Kigoma programme are expected to play an increasingly important role in meeting the growing energy demand of Tanzania's rural communities.

Implementation of the Kigoma project is expected to begin in May this year and is due for completion by July 2013. The project is part of the five-year Compact grant, extended to the United Republic of Tanzania by the Government of the United States of America through the Millennium Challenge Corporation (MCC) with the objective of reducing poverty and stimulating economic growth.

Jeff Felten, Managing Director, Camco Tanzania said: "We are delighted that the MCC has recognized the positive impact small-scale solar installations can have on rural off-grid communities in Tanzania. While industrialized countries are trying to rethink or refit their old coal-fired plants, much of Africa could potentially leapfrog that stage and move straight to renewable energy generation. The MCC's award of the Kigoma Solar Project to the joint venture partnership between Camco and RIL is an important validation of our unrivalled expertise and experience developing off-grid rural energy projects in Tanzania. In RIL we are pleased to have identified a strong contractor with which to partner and Camco looks forward to working together to further expand the market for solar energy use in Tanzania."

Francis Kibhisa, RIL's founder and Managing Director said: "The primary goal of the joint venture is to promote the use of solar PV by municipal organizations and commercial businesses in rural communities throughout Tanzania, many of which do not currently have access to the electricity grid. We hope to continue to work alongside Camco to expand the model implemented here and develop solar projects throughout Tanzania and beyond."

During the signing ceremony, MCA-T Chief Executive Officer, Mr. Bernard Mchomvu congratulated the joint venture for winning the tender following an international competitive procurement process and added "Successful implementation of the project will improve the economic and social well-being of the communities living in the targeted areas". 

Notes to the editor

Camco International Limited (Camco, AIM: CAO) is a global developer of clean energy solutions and projects to reduce greenhouse gas emissions with operations in the US, the UK, China, Africa, Russia and SEA. Camco has a 20-year track record in project development, technical delivery and policy development, working with local industry, multinational companies, governments and regulatory bodies. The Carbon Project Development business has created one of the largest emission reductions portfolios and has structured ground breaking and innovative arrangements for the sale and delivery of emission reductions to compliance and voluntary buyers. Camco's Clean Energy Project Development and Investment teams collaborate with industry, project developers, equipment providers and investor groups to create emissions-to-energy projects and maximise sustainable energy production across a range of industries; including agricultural methane, industrial energy efficiency, coal mine methane, municipal solid waste, biomass and landfill gas. The Energy and Carbon Advisory teams provide strategic, commercial and technical expertise accrued over two decades to deliver low carbon energy and sustainable development solutions.

www.camcoglobal.com

Rex Investment Limited, is a Tanzania Contractors Registration Board Class 1 rated contractor (Bid Form BSF2) and Class 5 rated Electrical Works Contractor. The company was founded in 2000 by qualified engineers and has a complement of requisite skills for execution of the installations to PV GAP's recommended PVRS10 standard. The company owns and operates a retail outlet in Dar es Salaam and has partnered with several solar energy distributorships throughout Tanzania.

MCA-T - The Millennium Challenge Corporation (MCC) is an innovative and independent U.S. foreign aid agency that is helping lead the fight against global poverty. Created by the U.S. Congress in January 2004 with strong bipartisan support, MCC is changing the conversation on how best to deliver smart U.S. foreign assistance by focusing on good policies, country ownership, and results. MCC forms partnerships with some of the world's poorest countries, but only those committed to good governance, economic freedom and investments in their citizens. MCC provides these well-performing countries with large-scale grants to fund country-led solutions for reducing poverty through sustainable economic growth. MCC grants complement other U.S. and international development programs. MCC is operating in Tanzania as the Millennium Challenge Account - Tanzania (MCA-T).

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