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dam-l african power update/LS
>From http://www.marekinc.com/BusBriefsElectric.html
From NCN 2000 Financial and Business Network.
Sixty day file, updated Wednesday,
June 14, 2000
Angola
Russia's diamond company, Almazy
Alrosa-Sakha will invest $40 million in
constructing a dam over the Chicapa River in
Angola. Xinhua reported on June 6
that the dam will serve the energy needs of
the Catoca diamond mining project.
Ghana
Ghana will increase generation of
electricity from thermal plants. Reuters reported
on April 27 that the increase will be from
330 megawatts to 1,100 megawatts over
the next five years. Poor rainfall halved
power generation from its 1,100 megawatts
hydropower station. Ghana has depended on
emergency power supply from
diesel-fired plants as well as electricity
imports from neighboring Côte d'Ivoire.
Ghana currently imports about 70,000 barrels
per day of crude oil from Nigeria.
Kenya
Kenya's power rationing causes appeal for
extension of loan repayments by Fresh
Produce Exporters Association. Tervil Okoko
reported for PANA on June 7 that
members of the fresh produce exporters
association are currently being affected by
daytime power cuts, which are creating havoc
on irrigation plans and temperature
controls in both green and cooling houses.
Electricity is used in pumping water, in
post harvest handling and in cooling before
grading. Some flower farms may be
forced to close operations until the power
crisis ends. Casual workers will have to
be laid off. Israel, Colombia, South Africa,
Egypt and some West African countries
will compete for market share lost by Kenya.
Kenya Power and Lighting Company (KPLC) is
procuring two diesel power
generating plants. Xinhua reported on June 2
that KPLC signed for the accelerated
delivery of two 55- megawatt plants. A
consortium of Deutz (UK) Limited and
Burmeister and Wain Scandinavian Contractor
will provide the plants. The plants
will located in Lanet and Eldoret, both in
Rift Valley Province.
Kenya will import 50 megawatts of
electricity from Uganda. Peter Munaita in
Nairobi, Abbey Mutumba Lule and David Kaiza
in Kampala reported for The East
African on May 25 that Kenya hopes to avoid
estimated losses of up to $83 million
due to power rationing. Uganda offered to
supply the electricity at about 5 US cents
per kilowatt hour, while Kenya wants a price
of 4 US cents. Uganda currently
supplies 10 megawatts to Kenya during the
peak period at 8.5 US cents per unit.
Uganda's supply of power to Kenya will rise
to 162 MW in the future.
Kenya increases power-rationing. Chege
Mbitiru reported for AP on May 24 that
12-hour cuts, six days a week will apply to
all areas except the central business
district of the capital, Nairobi. The
government is negotiating to buy 30 megawatts
from neighboring Uganda and considering
renting a diesel power plant and
repairing a retired 30 megawatt diesel plant
at the Indian Ocean port of Mombasa.
Renting a plant will cost $10 million a
month and consume diesel worth $20
million. Construction is under way on at
least six geothermal and thermal plants to
reduce dependency on hydroelectricity, but
none of the plants will be operational
before next year.
Kenya's longstanding drought is threatening
to close down a major dam's
operation. Xinhua reported on May 23 that
Nairobi municipal water officials have
noted a dramatic drop in the water level at
Sasumua Dam as a five-year drought
continues to affect catchment basins. J.P.
Kimani, Acting General Manager of the
City Water and Sewage Department, noted that
city councilors will assess the
situation on May 23. As a result of the low
water level, Kenya Power and Lighting
Company officials announced on May 22 that
power rationing would increase from
6 hours daily for 3 days each week to 12-18
hours daily for 4 days each week. The
current drought is considered to be the most
severe in 16 years, said Meteorological
Department Director Evens Mukolwe.
Electricity rationing was initiated last
September because of the inability to
produce hydroelectric power during the
drought; the industrial sector has likewise
been affected due to the scarcity of
power.
Kenya will lease 180 mobile generators to
cover 180 megawatt shortfall. Peter
Munaita reported for The East African on May
18 that the Kenya Power and
Lighting Company will pay $30 million per month.
French loan to Kenya for rural
electrification. Xinhua reported on May 18 that a
soft loan of about $8.4 million will be used
to supply electricity to Western
Province. The loan will finance extension of
medium voltage electrical works and
build transformation stations and extensions
to large customers such as processing
plants, markets, schools and health centers
among other social infrastructure.
Electricity cuts in Kenya up to 12 to 18
hours per day for four days per week. AP
reported on May 16 that poor planning and a
continued shortage of water in
hydroelectric dams due to inadequate
rainfall are responsible. Increased cuts are
necessary in part because the Ministry of
Energy and Ken-Gen failed to act on a
warning last November that a forecast
failure of the April-May rains would
negatively affect power generation. The
government will meet this week to decide
whether to import additional diesel
generators or increase the import of power from
neighboring Uganda. Both options will
increase the cost of electricity.
Kenya power cuts could rise to 12 hours per
day. David Mageria reported for
Reuters on May 11 that long rains normally
run from March to May but the country
had very little rainfall in the first two
months of the season. Rainfall has improved
in some parts of Kenya this month but will
not be sufficient to offset the effects of
the drought. Rains are predicted in May,
June and July but mainly in the western
and southern parts of the country, while the
main power generating dams are
located in central and eastern areas. Most
of Kenya's electricity comes from
hydro-electric power, and the unreliability
of supplies has seriously undermined the
manufacturing sector, which grew by just 1.0
percent in 1999 compared to 1.3
percent the previous year. Electricity
charges have risen sharply to 1.55 shillings
per kilowatt hour from 0.13 shillings in
August. Kenya hopes to persuade Uganda
to supply more power to Kenya and is
studying the possibility of bringing in
emergency power generators.
Persistent drought forces Kenya to import
more electricity from Uganda. Xinhua
reported on May 11 that power from Uganda
will make up 30 percent of the total
domestic supply in Kenya. Kenya adopted
power rationing last September.
IFC will invest $41 million in Kipevu II in
Kenya. The International Finance
Corporation (IFC) reported on May 5 that the
$86 million project will build a 74
megawatt diesel engine generation plant in
Mombasa. The private sector financing
of Kipevu will enable the government to
conserve limited public resources for other
priorities, such as education and
healthcare. The project was awarded on a
build-own-operate basis to lead developer
Wartsila NSD Power Development.
Wartsila will retain 15.1 percent ownership
in the project company. Cinergy Global
Power Ltd. (CGP) and Industrial Promotion
Services (Kenya) Ltd. (IPS-K) will be
the lead shareholders with 49.9 percent
ownership through a 50-50 joint venture
holding company. IFC has a 15 percent
shareholding in IPS-K. The CDC Group
plc (CDC), the British bilateral development
agency, will have 30 percent
ownership. AP reported on May 8 that
inadequate rainfall is causing power cuts.
All parts of the East African country except
the central business district of the
capital, Nairobi, and strategic
installations are subject to six-hour power cuts at least
three days a week. Improvement is expected
by the October-November short rains.
Mozambique
Strike at the Cahora Bassa dam in Mozambique
is averted. Xinhua reported on May
10 that last minute talks between the union
committee and the management averted
the strike, but it is not yet clear what
concessions the management have made on the
workers' key demand for the same pay and
same conditions as their Portuguese
counterparts. Over 80 percent of the shares
in HCB is owned by the Portuguese
state. Cahora Bassa has a total work force
of 1,300, with 900 of them being
Mozambican. Expatriates will be replaced
gradually by Mozambicans. HCB is
facing economic difficulties with both of
its main clients, South Africa and
Zimbabwe.
Some 900 workers at the Cahora Bassa dam and
hydroelectric complex (HCB) in
the western Mozambican province of Tete are
threatening to go on strike to demand
the same rights for Mozambican workers as
those granted to foreigners. Xinhua
reported on May 9 that a strike could put at
risk flooding in the Zambezi Valley, and
neighboring Zimbabwe may be deprived of
Cahora Bassa electricity. Negotiations
are underway. HCB, located on Rio Zambeze,
was built in early 1970s. It supplies
electricity not only to Mozambique, but also
to Zimbabwe and Malawi. Over 80
percent of the shares in HCB is owned by the
Portuguese government while the
remainder is owned by the Mozambican government.
Nigeria
Nigeria will spend $534 million in increased
electricity output to 4000 megawatts.
Reuters reported on June 12 that an action
plan, drawn up by a technical committee
running state power utility NEPA, entails a
short-term expenditure of 16 billion
naira to rehabilitate ailing electricity
generating plants and acquire spare parts.
Nigeria's electric power supply will take an
estimated eight months to rehabilitate
following a massive March systems failure.
This Day reported on May 22 that only
1,500 megawatts of electricity are produced,
with the nation's power sector
considered to be in worse shape than it was
under the National Electric Power
Authority. Continuing lack of electricity in
different regions of the country has
caused employment problems as well as
paralysis of telephone services and water
supplies. The Bureau of Public Enterprises
recently announced that 37 companies
of the Independent Power Producers have been
invited to participate in emergency
power generation. Many of the firms are from
the United States, France, Israel,
Singapore, Italy, China, Canada and the UK.
According to a government official,
the companies have expressed a desire to
participate in Nigeria's power sector and
have guaranteed delivery of between 49 and
2,260 megawatts of electricity.
Thirty seven power companies are interested
in Nigeria's emergency power
program. Nneoma Ukeje-Eloagu reported for
This Day on May 18 that based on the
proposals, up to 5,000 megawatts can be
deployed in six months. Request For
Proposals (RFPs) will be issued to these
power companies.
Eskom South Africa proposes construction of
2,000 megawatt coal-fired generator
in Nigeria. Chijama Ogbu reported for the
Post Express on May 11 that the
company plans to concentrate in power
generation in Nigeria. The plant is to be
located in the outskirts of Enugu. The
choice of Enugu is because of the heavy
concentration of coal deposits in the area.
Officials of Eskom held discussions with
Nigeria's Federal Government. A delaying
factor for the project is on how to sell
the generated power to NEPA.
Solar Power System is launched in Nigeria.
This Day reported on May 2 that the
system is a possible solution to the rural
electrification and incessant power failure.
The system was developed by Shell Solar and
Conlong of South Africa. The
product is designed to provide electricity
to individual households and small public
utilities especially in rural communities.
NNPC signs $350 million deal with Agip to
build 450 megawatt power plant. Mike
Oduniyi reported for Reuters on April 26
that this could be a forerunner to a move
by oil majors into Nigeria's huge power
generation sector. The government is also
holding talks with Royal Dutch/Shell and
Texaco Inc. to set up private power plants
that would provide emergency electricity
supply. Italy's electricity giant Enel will be
the technical partner for the project, to be
located in the oil-producing Niger Delta
town of Kwale. Agip will hold a 51 percent
controlling stake. Exxon Mobil gained
approval last month to build and operate a
350 megawatt gas turbine station, in the
Niger Delta.
Lagos State independent power project
expected to continue. Femi Adepoju
reported for P.M. News on April 25 that
President Obasanjo directed that a meeting
be held immediately to harmonize positions
of various interests in the initiative.
Generators on barges brought in by Enron
have been converted to use gas.
Nigeria names short list for privatization
of Nigerian Electric Power Authority.
Reuters reported on April 25 that Arthur
Andersen, Deloitte Touche Tohmatsu and
PricewaterhouseCoopers were invited to
submit requests for proposals for legal and
regulatory advisory services in Nigeria
power sector reforms. Others named were
Hagler Bailey, London Economics and
Strikeman Elliot and Chemonics. The six
firms were short-listed out of nearly 150
legal and management firms that expressed
interest.
U.S. protests Nigeria's cancellation of two
energy contracts with American firms.
Bature Umar reported for This Day on April
20 that ENRON was rejected for
supply of emergency electricity because the
National Electric Power Authority
(NEPA) argued that the independent firm
could not be allowed to supply power to
Lagos using NEPA lines. The other company is
Babcock & Wilcox, also involved
in the energy sector.
South Africa
Eskom will invest more than $1 billion
throughout Africa during the next five
years. The Associated Press reports that the
South Africa state-owned power
company's plans to invest $1.016 billion in
power generation and distribution were
announced by Public Enterprises Minister Mr.
Jeff Radebe. Plans are to apportion
about $445 million for West African
projects, $245 million for East Africa, $240
million for Southern Africa, and $86 million
in Central and North Africa.
Investments will be made through the Eskom
Enterprises subsidiary, created earlier
this year as a vehicle for commercializing
Eskom's non-regulated activities. In other
announcements, Radebe said that state-owned
transportation firm Spoornet was
discussing purchase of stakes in Nigerian,
Ghanaian, Guinean, Zambian and
Tanzanian railways, while South African
Airways may see equity purchase in two
other African airlines. Finally, he said,
parastatal armaments firm Denel is not
considering whether to purchase equity in
other African armaments industries.
South Africa's Eskom Enterprises identifies
investments of $1 billion needed for
electricity generation, distribution,
transmission and telecommunication sectors.
Linda Ensor reported for Business Day on May
23 that investments include
rehabilitation projects, acquisitions and
equity, as well as greenfield projects with
$445 million identified in west Africa, $86
million in central and north Africa, $245
million in east Africa and $240 million in
southern Africa. Eskom Enterprises, a
wholly owned subsidiary of Eskom, officially
started operations this year and aims
to become a pre-eminent energy and related
services business in Africa with global
stature. Eskom invested R200m in and
provided a R600m guarantee for the project
cost of the Motraco transmission line
supplying power to Mozal Aluminum in
Mozambique.
South Africa's Eskom may acquire a stake in
ZESA. Lucia Mutikani reported for
Reuters on April 26 that Zimbabwe
Electricity Supply Authority (ZESA) imports 13
percent of its needs from ESKOM. ZESA owes
Eskom some $16.1 million.
Options for Eskom include bidding for power
stations owned by ZESA; or the
suspension of supplies until the debt is settled.
South Africa's Eskom will be restructured
but not fully privatized. Reuters reported
on April 26 that speculation is mounting the
government is considering a
multi-billion rand international share issue
for Eskom following a recent two-week
European road show by top executives.
Government favors sale of about 10
percent of Eskom's core electricity
generation business over two years. Eskom is
valued at $10.5 billion. Government hopes
for greater connection to the grid before
total privatization. Economists note that
partial privatization could release at least 20
billion rand into state coffers.
Uganda
Uganda Electricity Board (UEB) will be
privatized within next year. Paul Busharizi
reported for Reuters on May 24 that
privatization advisers are in place to advise on
how many companies will be made out of UEB.
Assets will not be sold, rather
concessions will be granted for various
functions. Concessions for distribution and
generations will be granted by June of next
year. The government will retain
transmission for the foreseeable future.
Power outages are a daily affair in Uganda
leading to the loss of up to 90 productive
days annually. The new 40 MGW turbine
on the Kiira dam has done little to
alleviate the situation. The new turbine is one of
five on the 200 MGW Kiira dam. An American
firm AES Nile Independent Power
is building a $500 million dam on the river
Nile. NORPAK, a Norwegian-led
consortium, is applying for a license to
build another 200 MGW dam further down
the river. UEB has cut its staff to 1,900
from 3,000 over the last three years, and is
working to minimize losses from theft and
inefficiency. Uganda could increase
power sales to its neighbors, including Kenya.
Uganda renames Owen Falls power extension
project. New Vision reported on
May 20 that the 200-mega watts facility is
now called Nalubaale Dam. The new
dam is named Kiira Power Station. The $233
million project will initially add
40mw to the current 180mw produced by the
old station, to reduce the power
shortage by 50%.
Uganda's Nile River power station comes on
line. PANA reported on May 18 that
the $300 million will add 40 megawatts (MW)
to the national grid. The second
phase of the same project is due for
completion in July when another 40 MW would
be added to the grid system, lowering
Uganda's power shortfall from 100 to 20
MW. Uganda's current power demand is
approximately 280 MW with an annual
growth rate of 20 MW.
Uganda imposes additional tax on
electricity. Abubaker Mukose reported for New
Vision on April 22 that The Uganda
Electricity Board (UEB) will use the funds for
rural electrification. The government has
embarked on an extensive rural
electrification program in order to increase
rural electricity access to about 10%, up
from the current 1% in the next 10 years.
Government plans to generate power
from coffee husks, cane bagasse and
geo-thermal power and diesel engines to cover
the program.
Uganda hopes to increase electricity
coverage to 10 percent in next 10 years.
Xinhua reported on April 17 that a
Japan-aided power station in Mukono district,
25 km east of the capital city Kampala was
opened. The Ugandan annual electricity
production stands at 180 megawatts against a
demand of 260 megawatts.
Zambia
Strong interest is expressed in developing
Zambia's 80 megawatt Itezhi Tezhi
hydropower project. Xinhua reported on June
2 that the project will boost the
country's capacity to export electricity to
Tanzania, Zimbabwe, the Democratic
Republic of the Congo and Kenya. In
addition, COMESA has advised Zambia to
exploit hydro-power potential for South
Africa. Xinhua reported on June 1 that the
Zambian government has announced its plans
to construct two hydro-electricity
power plants in the country. South Africa is
expected to develop a critical power
shortage by 2008.
USEA signs cooperative agreement with
Zambia's Energy Regulation Board.
PRNewswire reported on May 18 that the
agreement will focus on safeguarding the
interests of consumers, promoting
competition and private investment;
environmental protection, and supporting
sector policy goals.
Zambia gains access to World Bank and
European Investment Bank funds for
Power Rehabilitation Project. The Times of
Zambia reported on April 21 that some
$230 million will be released now that the
Zambia Electricity Supply Corporation
(Zesco) increased electricity tariffs by 52
per cent. Works to be done on the Zesco
projects will go through international
tendering procedures. The $230 million PRP
funds will cover projects like the Kariba
North Bank, Kafue Gorge and the
Copperbelt. Mackson Wasamunu reported for
the Post of Zambia on April 20 that
Zambia Congress of Trade Unions (ZCTU)
demanded withdrawal of Zambia
Electricity Supply Corporations (ZESCO)
hiked tariffs. Opposition ZAP said that
ZESCO's 25 per cent tariff increase is a
disincentive to investment.
ZESCO increases electricity tariffs by 28
percent. The Times of Zambia reported on
April 19 that the increase was necessary to
help meet financial objectives in terms of
revenue requirements.
Zambia's Kafue town is building garbage
incinerator. The Times of Zambia
reported on April 18 that construction of
the $90 million incinerator capable of
incinerating one million tons of garbage and
generating 6,350 kilowatts of
electricity will start in June. An American
company, Forbees International, sourced
the funding for another American company,
Babcock & Wilcox (B&W)
International Inc. The plant will take about
18 months to complete. The plant will
sell 3,043 kw of the 6,350 kws generated
while 65 kilowatts will be used to sustain
the plant needs. For over 130 years, B&W has
been supplying innovative solutions
to meet the world's growing energy needs.
The firm has power generation systems
and equipment in more than 800 utilities and
industries in over 90 countries. The
firm has grown from a partnership of two
entrepreneurs to a company with
worldwide locations to serve customers in
electric power, nuclear power, pulp and
paper, industrial, construction services,
and environmental markets. B&W is an
operating unit of McDermott International.
Zimbabwe
ZESA seeks $65 million facility from
London's Standard Chartered Bank. The
Zimbabwe Independent reported on April 21
that Zimbabwe Electricity Supply
Authority owes Mozambique's Hydro Cabora
Bassa (HCB), Congo's SNEL and
South Africa's Eskom. The aggregate interest
rate charged by the consortium of
banks led by Standard Bank will be well
below what suppliers charge.
ZESA introduces power rationing. The
Financial Gazette reported on April 20 that
Zimbabwean industries will not be affected
by the ongoing power rationing by the
Zimbabwe Electricity Supply Authority
(ZESA). Only individual homes will be
affected. Power cuts are the result of a
lack of hard cash to pay for imports. ZESA
normally imports 55 percent of the nation's
power. ZESA has accrued an estimated
$12 billion debt mainly to three regional
power utilities - Eskom of South Africa,
SNEL of the Democratic Republic of the Congo
and Electricitie de Mozambique.
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Lori Pottinger, Director, Southern Africa Program,
and Editor, World Rivers Review
International Rivers Network
1847 Berkeley Way, Berkeley, California 94703, USA
Tel. (510) 848 1155 Fax (510) 848 1008
http://www.irn.org
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