Africa power sector offers new opportunities, says IFC

Expected aid cutbacks and a push by some African governments to tackle yawning infrastructure gaps by public-private partnerships present a real opportunity for investors, the World Bank’s private sector arm has told Reuters.

Only 5 per cent of sub-Saharan Africa’s generation capacity of about 60 GW is generated by the private sector while in Latin America’s top six economies the figure is about 50 per cent, according to the International Finance Corporation (IFC), which targets involvement in projects to raise generation by 1.5 GW between 2012 and 2016.

Yolande Duhem, head of IFC’s operations in West and Central Africa, said the IFC’s involvement in ContourGlobal in Togo and Dibamba Power Development Company in Cameroon were examples of projects that could be replicated elsewhere.

“We see an acceleration. It is still not enough to bridge the gap but if you have this type of progress (showing) the partnerships can work it is an opportunity,” she said. The IFC now has more independent power producers in its pipeline than in the 2002–09 period, she said.

SN Power to acquire 51 per cent stake in Zambian hydropower project

SN Power ACA Holdings of Singapore has been granted approval by Zambia to acquire 51 per cent equity in Lunsemfwa Hydropower Company for $880m.

Wanda Gorge Investment, which owned 99 per cent before the transaction, will retain 49 per cent.

Zambia’s antitrust body ruled that Lunsemfwa is not a dominant or monopoly company because it held only 3 per cent of Zambia’s electricity generation and supply market. The other 97 per cent is supplied by state-owned utility Zambia Electricity Supply Corporation.

Lebanon power costs soar

Blominvest has published an overview of the electricity sector in Lebanon that argues that Lebanon needs to speed up the rehabilitation of the sector and to consider seriously allowing the private sector to take part in mega energy projects.

The report claims that public transfers to Electricite du Liban (EDL) absorb an excessive amount of the government budget, amounting to $1.5bn in 2009 (14.3 per cent of GDP), and are expected to reach $2bn by the end of 2011.

Uganda looks to scrap thermal power subsidy

Uganda parliament’s decision to conduct an audit into financial abuse in the energy sector could result in an increase in demands to scrap the government subsidy given to thermal power generation companies.

Benon Mutambi, executive director of the Electricity Regulatory Authority (ERA), said the subsidy payments had reached $115.3m, less than one year after the World Bank’s International Development Agency’s $212m loan was exhausted in October 2010.

The government has been providing an annual subsidy of $35.4m for the past seven years in addition to the loan.

Aston Kajara, minister in charge of investment in Uganda, said that the electricity subsidy was too high, and that consumers should “either foot the bill or stay in darkness”.

The Kampala Central MP Muhammad Nsereko, who moved the motion to conduct an audit into abuse in the energy sector, said parliament needs to investigate the inconsistencies in the amount of energy supplied.

Nigeria needs power investment of $3.4bn

Nigeria’s minister of power, Bart Nnaji, has said that Nigeria will require a capital investment of $3.4bn to increase the country’s electricity generating capacity from the current 4200 MW to 13 000 MW by 2013.

But the state would only be able to fund a fraction of this investment as 80 per cent of the ministry’s spending goes on salaries and welfare, he said. “There is therefore a new drive to attract investment in the sector, have a cost reflective tariff, and privatize, because the capital needed is enormous and the government cannot fund even a fraction of the necessary investments,” he said.

Bushehr nuclear plant due online in August

Fereydoun Abbasi-Davani, director of Atomic Energy Organisation of Iran (AEOI), said Bushehr nuclear power plant will be connected to the national grid by the end of August.

Bushehr will be able to generate 40 per cent of its total capacity as soon as it is connected to the grid, said Abbasi-Davani.

The plant reached first fuel loading in August 2010, as engineers loaded 163 fuel rods into the reactor under the supervision of the International Atomic Energy Agency (IAEA).

• • •

Egypt: Orascom Construction Industries (OCI) has won a $181m contract from the Cairo Electricity Production Company to build a 1500 MW combined-cycle power station in Giza.

Ethiopia: The government has announced that it has mobilized $200m towards constructing the 5250 MW Great Renaissance Dam, set to cost $5bn, through selling bonds locally, including to schoolchildren.

Iraq: Electricity minister Raad Shalal has been dismissed and is under investigation over two deals worth $1.7bn – a $1.2bn deal with the Canadian Alliance for Power Generation Equipment for ten power stations totalling 1 GW, and a $500m contract with Maschinenbau Halberstadt.

Japan: Japan is considering joining the US-led Convention on Supplementary Compensation for Nuclear Damage treaty in a bid to fend off excessive overseas damage claims related to nuclear accidents, said the Nikkei newspaper.

Oman: Dhofar Energy Company has signed six agreements worth $83m with several firms to expand the Salalah electricity network infrastructure and connect it with a 445 MW power plant being built in the Governorate of Dhofar.

Saudi Arabia: ABB has won a $17m order from Hanwha Engineering & Construction of Korea to extend a Marafiq substation at Yanbu, integrating 500 MW from two new blocks to raise output to 1500 MW.

South Africa: The bidding process opened on 4 August for ‘green’ energy projects to feed the national grid. The government plans to add more than 50 GW, with 30 per cent from independent power producers and 3725 MW from renewables.

Turkey: The government aims to meeting rising electricity demand by installing smart grid projects and developing renewables to supply 30 per cent of electricity by 2023, said embassy energy business leader Serdar Cetinkaya.

UAE: Dubai’s Supreme Council of Energy has said it will freeze electricity and water tariffs in the emirate “during the few coming years”, despite calls for a rise in rates to curb heavy consumption fuelled by low prices.

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