Tractebel buys into 1800 MW Polaniec

Belgian energy company Tractebel has acquired a 25 per cent stake in Poland’s 1800 MW coal-fired Polaniec power plant. The sale is the latest in Poland’s electricity sector privatization programme that has seen Electricit├ę de France and Vattenfall purchase stakes in power plants.

Polaniec is Poland’s fourth largest electricity producer, generating around six per cent of the country’s electricity. Tractebel has committed to carrying out a $43m renovation programme on the plant over five years, and will be able to increase its stake in the plant to 37.5 per cent after two years.

The acquisition is part of Tractebel’s European strategy. Tractebel’s CEO, Jean-Pierre Hansen, commented: “The Polaniec power plant is well

positioned to sell its output to the increasingly liberalized Polish electricity market, and beyond that in Europe. This acquisition forms a good basis to tackle the German market.”

Polaniec had revenues in 1998 of $164m. Only half of its capacity is tied to power purchasing contracts, which terminate in 2006. Tractebel could make investments of up to $323m in the plant over the next 11 years.

Nigeria calls for emergency bids

In an effort to improve the country’s electricity supply system, the Nigerian government has called for bids from international power companies for the development of emergency power projects and has also awarded Japan’s Marubeni two contracts for the rehabilitation of parts of the country’s electricity infrastructure.

The Nigerian government said in April that it is seeking consortia interested in installing, operating and maintaining power plants of at least 300 MW in size at predetermined sites. The World Bank is assisting in the implementation of the projects. US power developer Enron is also reported to be renegotiating an $800m agreement for a fast-track emergency power project in Nigeria after objections by the World Bank to the terms of the original deal.

The country has experienced power shortages since its available capacity fell to 1700 MW in February 2000. Actual installed capacity in Nigeria is around 6000 MW but much of the country’s power infrastructure has been neglected and requires urgent rehabilitation.

In early April, the Nigerian government awarded Marubeni two contracts for rehabilitation work on the country’s network. Marubeni will refit a unit of Nigeria’s largest power plant at Egbin, and will also rehabilitate all of the National Electric Power Authority’s substations.

Qatar makes first privatization move

Authorities in Qatar have approved the formation of a water and electricity company in what is the first step towards privatization of its electricity industry. The state is awaiting emiri approval before going ahead with the plans.

The privatization and restructuring of the Gulf Arab state’s electricity industry will involve the formation of the Qatar General Electricity and Water Corporation (Kahramaa), an autonomous government body replacing the Electricity and Water Ministry.

Kahramaa will be the sole authority for planning and implementing power and water projects. It will also handle transmission and distribution, which will be privatized in the next phase of restructuring.

Turkey nuclear setback

Turkey’s long-delayed plans for the implementation of a nuclear power plant near Akkuyu, suffered a fresh setback in April when the government’s treasury said that it would be unable to provide the necessary financial guarantees. The treasury asked the government to postpone the tender assessment for the project until 2001.

The treasury said that a three-year anti-inflation programme deal struck with the IMF required it to limit financial guarantees for large projects. The treasury must guarantee the credit package for the project, which will be financed by the winning consortium.

Chernobyl to close

Ukraine’s cabinet of ministers has issued a resolution for the closure of the Chernobyl nuclear power plant by the end of 2000. The move followed news that the G7 group of industrialized nations have pledged a further $300m to finance the construction of a concrete shell to permanently seal the reactor.

Closure of Chernobyl, site of the world’s worst nuclear accident in 1986, has been delayed by wranglings over financial support for the shell and for the construction of two new nuclear reactors in the country – Khmelnitsky-2 and Rivne-4 (K2R4). Financing for K2R4, largely from the EBRD, now looks in doubt due to Ukraine’s failure to reform its energy sector. Italy and Germany are also against the funding of new nuclear projects in Ukraine.

News digest

Czech Republic: Germany’s RWE has raised its 13.8 per cent stake in Czech energy distributor Stredoceska energeticka to 34.37 per cent by buying shares from local municipalities. RWE is the second largest stakeholder in the company and also owns minority stakes in electricity distributor Prazska energeticka and gas distributor Prazska plynarenska.

Lithuania: The European Commission and the Lithuanian government have said that the June donors’ conference can be expected to come up with the funding needed for the closure of the number 1 reactor at the Ignalina nuclear power station. The Lithuanian government is expecting to pass legislation to close the plant very shortly. Closure of the plant is expected to cost around $1bn.

Oman: Oman’s United Power Co. has completed a $104m project to triple power generation capacity at its Al-Manah power plant. Commissioning is due to take place in May 2000. GE Power Systems supplied equipment that increased the output of the plant from 90 MW to 270 MW.

Poland: A new company – Polenergia SA – has been set up by Polish and German energy companies to help increase Polish exports to Germany and to improve Poland’s energy security. Polenergia is owned by Polskie Sieci Elektroenergetyczne (PSE), PreussenElektra and Kulczyk Holding. The company is expected to export around 10 000 MWh per year, but will not start large volume sales until 2001. At present, Poland only uses around 60 per cent of its peak electricity capacity.

Saudi Arabia: The Saudi Arabian Electricity Corporation has awarded a $20.8m contract to GE Power Systems for the expansion of its power plant at Tabarjal. GE will supply two 40 MW, MS6001B gas turbines through the Middle East Power Company, a joint venture between GE Power Systems and A* Abdullah Al-Tamimi & Co.

South Africa: Power utility Eskom is to be unbundled as part of wider moves by the South African government to restructure the country’s power industry. The government wants to introduce private sector participation and competition to the industry, but still retain an element of state ownership. Final plans for Eskom are due to be released in May 2000, and could involve the separation of the utility’s power stations into independent companies.

Uganda: The Ugandan government has vowed to increase the level of rural electrification in the country to ten per cent over the next ten years. The current level of electrification is one per cent while installed capacity stands at 180 MW compared to a demand of 260 MW.