Major Power Pool Projects Make Progress In Uganda And Congo

---

Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). A number of Africa's electrical power initiatives, which have been going through the fragile and often fraught 'planning' stage are now moving into the implementation stage. Significantly one of the driving forces in these schemes is the African company, Eskom, the major South African power utility. Pan-African water and electrical grid schemes have been dreamed and planned for by South African engineers for at least 40 years and although hydroelectric power from the Cahorra Bassa dam on the Zambezi in Mozambique is still the subject of a demand/price dispute, Eskom's Ugandan subsidiary will take over that country's electricity distribution in June and the Congo River based Grand Inga scheme (see IIR July 25,2002 - Powerful pan African interconnector plans on front burner) has taken a definite step forward.

Eskom Uganda Limited (Kampala, Uganda), a subsidiary of Eskom Enterprises (Johannesburg, South Africa) Africa, recently signed a $500,000 concession agreement with the government to run power generation business at the Kiira and Nalubale power stations at Jinja an industrial center on the Upper Nile. The plants will be brought up to their full 380 MW capacity, having been running at around 300 MW.

The Ugandan energy ministry said that the company is a joint venture with the Commonwealth Development Corporation (CDC) (London, United Kingdom), which provides risk capital for private sector business. The private sector will be the main player but there will be opportunity for government intervention according to the agreement. In terms of Uganda's broader development strategy under the ministry of energy and mineral development it is hoped that the Eskom deal will attract other private players. A rural electrification agency will be formed soon, which will handle funds for the development of electricity distribution. About $400 million has been secured from the International Development Authority, the Global Environmental facility and other sources. Programs are already running in power generation and transmission links.

One Ugandan project, which is still in contention rather than construction, is the $550 million Bujagali hydro dam project. This has stalled through corruption and financing complications and the contractor, AES Nile Power ( NYSE:AES) (Arlington, Virginia) is looking for clarity in order to be able to move ahead with the project.

In southern and West Africa the Grand Inga Congo project advanced in February with a meeting with Eskom and the power utilities of Botswana Power Corporation, Nampower of Namibia, Empresa Nacional de Electridade of Angola and Societe Nationale d'Electricite of the Congo and other members of the southern African power pool of the Southern African Development Community (SADC).

The total generating capacity of the Congo River has been estimated at 39,000 MW. The initial plan, now moving forward, is to harness 3,000-5,000 MW over a 3,000-kilometer stretch to provide power to member countries.

The University of Durban-Westville in South Africa, which will be responsible for human resources, manpower and infrastructure research reports on the Inga project, that the technical challenge will be to engineer a power system that employs large-scale run-of-river generation and the associated long distance power transmission scheme incorporating the latest technology.

The overall power system must be capable of integration with existing and planned power systems in each of the five nations and receive local generation and distribute energy to local customers. The complete power pool which also includes Tanzania, Zambia, Malawi, Zimbabwe, and Mozambique runs a short term energy market, which allows for the exchange of surplus power at a low price and mutual power supply assistance.

Eskom has emphasized the importance of implementing development projects in Africa as a way of driving revenue growth outside South Africa in the continent. Eskom has operations in 31 countries on the African continent and produces more than 50% of the electricity consumed. It is promoting the establishment of an African grid that would take advantage of Eskom's existing links to the middle east and western europe. One link goes through Morocco to Spain and Europe and the other through Egypt to the middle east. Last year Eskom Enterprises and the Moroccan power utility Office National de l}Electricite agreed to form a joint venture company that will implement engineering and consulting studies related to electricity and also supply management services.

Angola, recently criticized about the evaporation into corrupt channels of billions of dollars of oil revenue, has won the support of the Development Bank of Southern Africa, based at Midrand between Johannesburg and Pretoria, to fund development projects in energy, telecommunications, road transport, water, sewage, information technology and human resources development. It is hoped this funding will facilitate the capacity to find and use the missing billions and turn the lights on.