Revonergy Plc., an independent power producer of renewable energy fuel, announced Thursday that it signed a memorandum of understanding with the Ondo state government of Nigeria to build a waste-to-energy power plant.

The 14-megawatt power plant will be fueled by wood waste and sawdust that is generated from the sawmill industry. The electricity that is produced will be supplied directly to the sawmills, and excess electricity will be sold to the national grid on a long-term power purchase agreement basis.

The sawmill industry in Ondo state suffers from chronic power shortages and frequent periods of blackout. The sawmill industry currently uses diesel generators for its electricity, but high diesel costs have increased the costs of wood processing.

Revonergy, headquartered in London, builds and owns renewable energy power plants in emerging markets.