Utilities warn on regulation
Regulatory uncertainty holds back the investment needed to secure power supplies, according to a new survey by PricewaterhouseCoopers.
The Global Utilities Survey, Under Pressure, is the seventh annual survey carried out by PwC.
According to the report, while a majority of investors believe deregulation is helping the investment climate, more than a third (39 per cent) say the reforms are damaging confidence, highlighting the dangers of inconsistent regulations, energy, tax and environmental policies.
Meeting projected supply needs will require an investment of $12.7 trillion in the period to 2030 in the power generation, transmission and distribution and gas supply infrastructures, but the sector is “failing to rise above the pack” when it comes to investors, PwC said. Financial services, consumer and retail, and pharmaceuticals were all rated just as attractive.
Without attracting investment, blackouts and service interruptions would become more likely, utilities said. An increasing number of respondents said supply security was a major concern – 72 per cent, up from 65 per cent in 2004.
Uzbekistan to sell power plant stakes
The Uzbek government hopes to raise $150 million by selling stakes in four power stations, but analysts say the age of the assets and the poor quality of the country’s electricity market may make it difficult to make the sale.
The four plants for sale include the Syrdarja thermal power plant, which at 3000 MW is the largest plant in the region and provides almost one third of the country’s power. The government is offering a 39 per cent stake in the plant. The other stations on the sale block are Mubarak, which generates 420 GWh annually, Tashkent, which generates 155 GWh, and Ferghana, which generates 560 GWh. Stakes of 39 per cent of each are being offered.
Russian companies were thought to be the most likely buyers as they already have interests in neighbouring Tajikistan and Kazakhstan.
Nigeria unveils infrastructure investment programme
Nigeria’s federal government is to spend $1.8 billion on its energy infrastructure over the next three years.
The plan would see construction of seven new gas fired power stations, along with gas transfer facilities and transmission and distribution infrastructure. A subcommittee will make proposals for funding the new projects; options include sales of excess crude oil and foreign reserves.
The seven power stations will add 1720 MW to the country’s generating capacity and will be sited in the Niger Delta at Omoku, Gbarain/Ubie, Sapele, Ikot Abasi, Eyaen, Egbema and Calabar. The sites were partly chosen so the plants could use gas from nearby sources.
Under the plan some $213 million will also be spent on T&D upgrades, in an attempt to improve reliability and increase the level of electrification from 40 per cent.
Mosenergo may be sold this year
Unified Energy Systems (UES) is planning to sell off its prize asset, Mosenergo, later this year, according to local reports.
Industry and Energy Minister Viktor Khristenko said that the six wholesale generation companies would not be sold before 2006 but has not given a timeline for the 14 territorial companies such as Mosenergo. Meanwhile investors have become impatient waiting for details of the timing and mechanism of the sales.
Analysts suggested the accelerated sell-off timetable for Mosenergo may be prompted by Gazprom, which has become the company’s largest minority shareholder.
The news comes as Mosenergo released figures for 2004 that show power consumption continuing to increase. The company has also been stepping up a campaign against electricity thefts, carrying out checks on meters and circuits. Mosenergo also has to deal with large defaulters including the Ministry of Defence, responsible for 60 per cent of government debt.
Afghanistan networks get power boost
The Asian development Bank has approved a $50 million loan to help provide power in Afghanistan. The money will be used to construct an electricity transmission network as well helping bring power to 1.2 million people in rural areas.
The ADB said only about nine per cent of Afghans currently have access to electricity and the country has no national transmission grid.
Meanwhile, the US Energy Association has urged Afghanistan to hand over power generation and supply to the private sector. The Association said the private sector would be willing to work in the country but the price of power would have to increase to provide a return. The suggestion was made at a seminar in Kabul on restoring the country’s infrastructure. Water and Power Minister Ismail Khan said he was ready to involve the private sector to improve efficiency. Others pointed out that most Afghans could not afford higher power prices and said it was too early for private ownership.
E.On Hungaria has signed an agreement with the Mohacs area local authority on a site for a new power station. The power company aims to begin construction on the gas or coal fuelled plant during 2007 and to start it up in 2009.
A China-Kazakhstan subcommittee on energy co-operation has met for the first time. Kazakhstan aims to produce 150m tonnes of oil and gas per year by the end of the decade, but said the project required new investment.
An EBRD loan is being sought by the Kazakhstan Electricity Grid Operating Co so it can build a 500kV transmission line linking the north and south of the country. The line will link Ekibastuzskaya and Yukgres.
E.On and the Romanian government have concluded a privatization agreement under which E.On will acquire a majority stake in regional utility Electrica Moldova. Based in northeastern Romania, the utility serves 11 per cent of the country’s wholesale market.
Unified Energy Systems is to set up an energy joint venture company with metals group Norilsk Nickel. The group will lease the assets of the local utility, Taimyrenergo, for ten years.
Work has started on a $400m 1776 km transmission line that will bring power from a new dam across Sudan. The transmission line is being built by China’s Harbin Power Station Co and it is due for completion in 2007.
The United Arab Emirates needs to almost double its current production of electricity by 2010 and will increase its generating capacity from 12 800 MW to 18 800 MW, according to local reports.
Potential investor companies aiming to take a stake in the Union Water & Electricity Company will be pre-qualified before the end of this year. The company is due to be sold to a single bidder, while shares in the Independent Water & Power Project will be sold in an IPO, local sources say.
A new 50 MW power plant at Lugogo will help meet peak demand and reduced load shedding, according to Uganda’s Electricity Transmission Co. The $30m plant from Aggreko was due to start up in late April.
Three new hydro projects are due to include private company participation, according to Energy Secretary Geoffrey Mukala. The first will be a $600m project on the Lunsemfwa and Luangwa rivers. Two private firms are investigating more potential hydro power station sites on the Kalungwishi river.