Aggreko wins 100MW contract and ups investment again

Two days after issuing a positive trading statement Aggreko has announced a further major contract win, to provide 100 MW of emergency power in Tanzania for 12 months.

The contract, valued at US$37 million, is with Tanzania Electric Supply Company (TANESCO) and comprises two 50 MW plants at Ubungo and Tegeta.

Tanzania generates more than two-thirds of its power from hydroelectric schemes, but these are being impacted by a drought in east Africa. Aggreko will also provide fuel for the two plants.

Aggreko supplied 40 MW of power in Tanzania between 2006 and 2008.

Meanwhile, in its latest trading statement - issued before the interim results are published in late August - Aggreko said growth seen in the first quarter of the year had accelerated in the second quarter and that group half-year revenues (excluding fuel sales) would grow by around 9% compared to the same period in 2010, with trading profits likely to be 20% up.

Growth is being led by the International Power Projects business - of which the Tanzania project is a good example - with a year-on-year increase of on-rented power of around 600 MW for the first half of the year.

Aggreko said its Local Businesses - smaller scale projects mainly in Europe and North America - would be similar to last year, despite the presence of large one-off contracts in 2010, such as the Vancouver Winter Olympics.

Because of the continued growth, Aggreko has again increased its capital expenditure plans for 2011, with an extra £30 million earmarked for fleet investment. This comes on top of the additional £70 million announced in April and means that Aggreko will spend something like £420 million on its fleet this year.