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DAM-L Africa power privatization summary (fwd)
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Date: Wed, 05 Sep 2001 10:17:17 -0700
To: irn-safrica@netvista.net
From: Ryan Hoover <ryan@irn.org>
Subject: Africa power privatization summary
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05/09/01 POWER
The Concession-Holders Move In
The ramparts that Africa?s public power companies used for years to fight
off privatization are falling one after the other. With their management
often in the hands of presidential cronies, the utilities were considered
part and parcel of a state?s sovereignty to the extent that public
companies and the boss? prot?g?s didn?t bother to pay their bills. The grim
gentlemen from the World Bank initially insisted that governments practice
?realistic? rates for power that had previously been subsidized. As this
proved impossible the only alternative was for governments to accept one of
two options that were often complementary : hand operating concessions to
outsiders or turn management of certain units over to private independent
power producers (IPPs). The operations were complicated ? with hard
bargaining over specifications and terms of reference ? and politically
sensitive. Not all the concession-holders can claim today that they?re
happy with the results. But that hasn?t stopped a handful of big foreign
groups from jostling with one another to assault the last bastions in
Uganda, Kenya or Nigeria. In Uganda, after years of in-fighting over how
the Uganda Electricity Board was to be sold off, the die has been cast: six
groups have been pre-qualified to bid to take over UEB entirely. They are
Britain?s CDC, Union Fenosa of Spain, Ireland?s ESB International, Marubeni
of Japan, India?s Tata and Eskom in South Africa. The winner will be
announced on Dec. 10. But the biggest cat and mouse game that the World
Bank played was with Kenya. The cat won and now five foreign firms have
been pre-qualified for the sell-off of KPLC. Still, the most delicate
?privatizing? operation remains that of the Nigerian Electric Power
Authority. Exasperated by a long series of power outages, Nigerians have
re-named NEPA ?Never Expect Power Again.? The government has promised to
break the company up into 28 different firms by next year at latest, to
make it more digestible once privatized.
In West Africa, Ivory Coast was the quickest to liquidate its old EECI,
handing the power utility over to France?s Bouygues which already managed
the country?s water supply. Since then, Bouygues has moved into the
upstream for the production of gas for its power stations and a first, big
private plant (ultimate capacity of 420 MW) has been delivered by ABB and
IPS, an affiliate of the Aga Khan group.
IPS teamed up with Bouygues in neighboring Mali to take over management of
Electricite du Mali (EDM) after the SHEC consortium (Bouygues, HQI, EDF and
CRC) was rebuffed. In Senegal, pressure from SENELEC?s unions led to the
departure of the Elyo-Hydro Quebec consortium that was accused of not
investing enough money, and things are back to square one: five other
groups, AES, EDF, ABB, Vivendi and Morocco?s ONE all asked in July for a
look at specifications for the SENELEC management deal. And in recent days,
AES Sirocco, interested in SENELEC, was awarded management of SONEL in
Cameroon without much competition from others (AEI 304). But in that
country, where nationalism is as nit-picking as in Nigeria, the story?s
only beginning for AES. In Gabon, Vivendi won SEEG at the last moment under
the nose of Lyonnaise des Eaux but has since run into flak: the local
newspapers are making it the scapegoat for pulling the plug on subscribers
who don?t pay their bill. Even president Omar Bongo has vented his spleen
against Vivendi, which controls French publications like l?Express which
criticizes his country. The life of a concession-holder has its problems.
Booted out of Senegal, the Elyo-Hydro Quebec International (HQI) consortium
has consoled itself by taking over management of Togo?s small CEET utility.
Hydro Quebec is also in the running to acquire SONELEC in Mauritania. Its
lone challenger there is EDF: both companies broke their teeth on a
management contract awarded by Guinea in 1994 (AEI 268). And finally, with
the greatest discretion, South Africa?s Eskom won a 15 year concession in
July to operate OMVS? dam at Manantali.
AFRICA ENERGY INTELLIGENCE N? 305
Ryan Hoover
Africa Campaigns
International Rivers Network
1847 Berkeley Way
Berkeley, CA 94703
USA
Phone: (510) 848-1155 Fax: (510) 848-1008
www.irn.org
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