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Proposed 300MW Coal Power Plant in Mozambique Moves to Financial Close

South African owned, London listed, Ncondezi Energy Ltd expects to start construction of a 300MW Coal-Fired Plant in Mozambique by the third quarter of 2022.

Financial Close for the project, located in the coal-rich Tete District in the north of the country, is targeted for H1 2022, with 36 months planned construction, meaning that the plant should be up and running by mid-2025.

The company is currently negotiating to exclusively supply power to Electricity of Mozambique (EDM), the Mozambican power utility. But it is looking, down the road, at the regional transmission hub to the country’s Northern Grid, with direct connections into South Africa and Zimbabwe and potential expansion plans into Malawi and Zambia, for which line route optimization is currently underway.

The contract for Engineering, Procurement, and Construction(EPC) of the power plant was signed with China Machinery Engineering Corporation (CMEC) at a virtual signing ceremony on September 9, 2021. The EPC contract confirms CMEC as the main contractor to provide design, engineering, manufacturing, procurement, construction, erection, installation, and commissioning of the Ncondezi 2x150MW coal-fired power station on an EPC turnkey basis. The contract is valid for three years and subject to standard conditions being met before construction can start, including the achievement of Financing Close.

The next phases of the project milestones are to finalize project tariff, finalize Power Purchase Agreement with EDM, finalize Power Concession Agreement with Mozambique Government, and then move to Financing Close.

The Chinese are heavily committed to this. As far back as July 2019, the project promoter had signed a Joint Development Agreement (JDA) with CMEC as EPC and O&M Contractor and the American giant General Electric (GE) as the main technology provider for co-development, construction, and operation.

In December 2019, Ncondezi Ltd received indicative debt terms from the Industrial and Commercial Bank of China (ICBC). In January 2020, it received a Letter of Interest from China Export & Credit Insurance Corporation (Sinosure) and in Aug 2020, received Shareholders Agreement Term sheet confirming CMEC’s intention as lead investor for 60% of the equity investment at financial close.

“COVID-19 lockdowns and increasing scrutiny on the rationale for new fossil fuel power generation have presented added challenges this year, however, the company believes that the project is sufficiently advanced and has the necessary support to effectively navigate them and unlock value through the delivery of key milestones before year-end,” says Hanno Pengilly, Ncondezi’s Chief Executive Officer.


Tanzania’s 2,115MW Dam to Start Electricity Production Mid 2022

The Tanzanian government plans to start operating the Julius Nyerere hydroelectric dam, in June 2022, when the first of nine turbines go into operation.  

Work is 63% complete on the facility, which will feed 2,115 MW, at peak, into Tanzania’s national power grid.

Egyptian companies, Elsewedy Electric and Arab Construction, the two EPC contractors, have almost completed the dam construction and are now focused on the hydroelectric plant, which will be located at the foot of the dam. Each of the proposed nine vertical Francis turbines units will be capable of delivering 235 MW of power, for a total capacity of 2,115 MW.

The dam will be filled in November 2021, to go by the Tanzanian government’s timetable. By June 2022, the first turbine will start supplying electricity to the Tanzanian Electricity Supply Company (TANESCO) grid. 

Work is currently focused on the installation of the draft tubes at the base of the ninth turbine, which will evacuate water from the electricity generators.

The plant could be fully operational by 2027. 

The Julius Nyerere Hydroelectric Dam will be one of the largest hydroelectric dams on the African continent, behind the 6,450 MW Grand Ethiopian Renaissance Dam (Gerd) and the 2,400 MW Batoka Gorge Dam on the Zambezi River between Zimbabwe and Zambia. Standing 134m high and capable of holding 32.3 billion m3 of water, with a reservoir covering an area of 1,350km². The Julius Nyerere dam is built on the Rufiji River and is one of the most contested projects because of its environmental impact, as it is located in the heart of the Selous National Park. The Tanzanian government has had to cut down 2.6Million trees before work begins in June 2019.


Ethiopia Completes Second Filling of Massive Hydropower Dam

Ethiopia finished the second phase of filling the reservoir of the Grand Ethiopian Renaissance Dam (GERD) reservoir on July 16, 2021, the country’s water minister has said.

Seleshi Bekele adds that “extreme rainfall this season in the Nile Basin” has aided a rapid filling of the dam.

GERD is Africa’s largest hydropower project, with a 6,000MW capacity.

Ethiopia’s first phase filling of the dam was in July 2020, during which 4.9Billion cubic metres of water was collected. The second phase was expected to be much higher, raising the volume to 18.4Billion cubic metres of water, though Mr. Bekele hasn’t announced the figures in the latest filling. The 74Billion cubic metre-capacity dam is expected to take five to seven years to fill.

An influential, strident critic of the project is Egypt, which considers GERD as a significant threat to its water supply. Egypt lies downstream of the Nile and has called on international organizations, including the United Nations, to stop Ethiopia from filling the dam while the three countries most affected: Egypt, Sudan, and Ethiopia, agree on how to fill it. Egypt’s President, Abdel Fattah El Sisi, has frequently declared that his country’s national security is a red line and stressed the need to reach a binding agreement on the filling and operation of the dam.

Egypt and Sudan had hoped to persuade global powers to take a more aggressive position towards Ethiopia and pressure it to return to the negotiating table with different mediators, but the United Nations Security Council declined to condemn Ethiopia’s decision to unilaterally fill the dam and called on all three countries to continue the current African Union-led process.


Nigerians Spend Huge Importing Electric Generators Bad for the Environment

By Bunmi Aduloju, NAREP Fellow

The penurious power supply in the country has paved way for a thriving electric generator market. Many Nigerians self-generate power using fossil fuel-powered generators that harm the environment.

“I opened one cartoon of mackerel fish costing about ₦28,000 a week ago. And I have not finished selling it. It is part of it that got spoilt. I cannot sell them to my customers because they will complain. Still, I have to pay ₦4000 at the end of the month for electricity.”

That was Faith Okorochukwu, fondly called Mama Kewe, a retailer of frozen poultry products and seafood for nine years, lamenting how erratic electricity supply has been affecting her sales. Mama Kewe plies her trade at the sprawling Alakija Market, one of the smallest conglomerations of shops on the Lagos -Badagry Expressway in the west of Lagos, Nigeria’s financial hub.

“For some days in the previous week, there was no power supply,” she added. “In fact, throughout yesterday, there was no power supply. I had to give my fishes out at a cheaper price to a woman who fries them at the junction. Still, some of my fishes went rotten.”

Now, imagine that when Mama Kewe bought a bigger 9KVA petrol generator, she was still concerned about not causing noise and environment pollution to her fellow traders.

“I cannot place my new generator in front of my shop because it is too large for the small space and then again, because the shops are packed, I don’t want to disturb my neighbours with the noise and the smoke,” she said pointing to the tiny walkway in the anterior of her shop.

So, she further piles up losses.

Unlike Mama Kewe, ‘Engineer’ John Ukeagu’s computer and printing business centre runs fully on generator. Situated on the first floor of a building at the same Alakija complex, his generator sits at the entrance of his shop. This usage comes at a high financial cost.

“I spend about 9000 naira every week on fuelling my generator and I still pay the authorities for the power supplied,” he said. “Today, I opened business around 8am and since then, I have been using my genset until about a few minutes ago (around 2pm), when power was restored”.

When asked which served his energy needs better between his generator and the national grid, he said, “Without my genset, I would not have any business here.”

The experiences of Mama Kewe and Ukeagu are not isolated; they are what small and medium scale entrepreneurs contend with to serve in an epilepsy inflicted electricity supply society.

According to the PWC MSMEs 2020 Survey, Nigeria’s MSMEs account for 96% of the total number of businesses in the country and contribute about 50% to the national GDP.

However, a research conducted by the Centre for Democracy and Development and SOAS, University of London, estimates that SMEs have about 1 to 5 hours of power supply from the national grid and so, have to self-generate.

A Fortune for Electric Generators

Nigeria is among the top six countries generating energy with back-up generators, together with India, Iraq, Pakistan, Venezuela, and Bangladesh, according to the International Finance Corporation, (IFC) and the collective capacity of small gasoline generators alone is eight times more than Nigeria’s entire national grid, according to a report by Dalberg, a non-profit R&D institute.

The same report estimated that Nigerians spend $12 billion every year on buying and operating small generators, with about 22M homes and small businesses relying on small gasoline generators.

With these figures, it is not startling to find the huge amount of money spent on importation.

From 2015 till 2019, Nigerians expended $499.38 million on importing electric generators, according to the UN Comtrade, a repository of official international trade statistics. In 2018 alone, $207.99 million was spent to import these generators, accounting for the highest and $27. 17 million in 2016, accounting for the lowest from 2015 till 2019.

Michael Ogunremi, an economist with Chapel Hill Denham, an independent investment banking and management firm, explained the financial implications of using electric generators.

“We have had frequent episodes of fuel scarcity and even, a few months ago, the government was contemplating hiking the price of fuel. There was a whole lot of noise about that. When you factor that into consideration and consider the number of people that use generators, you will be surprised at the cost Nigerians pay for energy,” he asserted.

He further explained that Nigeria’s case is peculiar because of the population figure of more than 200 million people and Nigeria’s inability to meet the energy needs has led to dependence on the use of electric generators.

 

Harmful Fossil Fuels Powered Generators

A World Bank study showed that the top three sources of PM2.5 in Lagos are road transport, industrial emissions and generators. Furthermore, it stated that, “In Lagos alone, about half of the city’s total energy demand is met by generators, the third source of PM 2.5.” Called particulate matter, PM2.5 at high level brings concern for people’s health.

Emmanuel Omolaja, a clean energy advocate and CEO, Renerworld Global Limited, outlined the composition of generator fumes.

“What generators produce as exhaust mostly comprises carbon dioxide, carbon monoxide, zinc and other chemicals. It is very evident that some of these chemicals are very harmful to human health and to the environment, he delineated.

“Based on the chemical composition of carbon dioxide particles, when it is emitted into the atmosphere, it traps heat,” he noted.

The pledge by Nigeria’s government to cut down emission by 20% in 2030 will be aided by the phasing out of these generators, a Dalberg report outlined.

“Replacing gasoline generators presents a big opportunity as they will produce 22% of targeted reductions from the energy sector in 2030, it stated.

Ban on “I better Pass My Neighbour” Generators

In 2020, a bill sponsored by Senator Bima Muhammadu Enagi to ban the use and importation of generating sets was received with hostility by Nigerians due to the deplorable power supply prevailing in the nation, according to a PM report.

But before then, there had been a ban on small generators.

In November 2015, the importation of small generators popularly known as “I better pass my neighbour” was banned because of its deteriorating environmental effects and health risk.

However, a young business owner, who preferred anonymity at the Trade Fair Market, Ojo, claimed that he was a bulk importer of small generators.

“We bring in two containers of tiger generators every month, he said.

Similarly, two other contacts from Alaba Suru and Alaba International mentioned that they had a large stock of these generators and they could sell in bulk to anyone willing to buy them.

It is going to be very difficult to track the import on these generators, explained Michael Omolaja, because import comes through the informal sector.

He further explained that, “Generators importation would most likely pass through the port. Even if the port is supposed to be more secure than the land borders, we still don’t have efficient control”

However, Mrs Ugo Madubuike, General Manager, Monitoring and Regulatory Services, Nigeria Ports Authority (NPA), replying via email to the claims by these generator importers, stated that it is not the responsibility of the Nigeria Ports Authority (NPA) to comment on these claims.

Can Solar Replace Electric Generators?

These mini generators cost about 40,000 naira. However, its sustainability is questionable.

Emmanuel Omolaja, elucidated the long-term viability of solar and electric generators.

“The payback period of solar is usually between one to three years. If an equivalent amount of money is spent on generators, you would have gotten the money you spent on solar back in sixteen months. And so, whatever your system is generating for the next thirty years or thereabout is just free power,” he explained.

But the upfront cost of solar alternatives is way higher than that of electric generators.

According to a Dalberg report, “Solar alternatives to gasoline generators exist in Nigeria, but are currently 15-20x more expensive. A typical 1.5 kVA gasoline generator costs $150, while a 1.5 kVA solar system costs $2,500.”

Emmanuel Omolaja blamed the use of electric generators on the increasing exchange rate.

He opined that the price of solar has risen overtime because of the exchange rate of dollar-to-naira.

“The relative cost of solar to generators would have been almost the same and people would have been encouraged to use solar,” he said.

The government must focus on allowing the private sector drive renewable energy so that the business of the government will only be to trigger incentives for people to switch from using generators to renewable energy, Emmaunuel Omolaja advised.

This story was produced under the NAREP Media Oil and Gas 2021 Fellowship of the Premium Times Centre for Investigative Journalism.

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Kenya’s “Excess” Power Generation Burdens the Country’s Electricity Distributor

Kenya’s Energy and Petroleum Regulatory Authority (Epra) reports that the country’s electricity generating firms have increased their output to such an extent that the nation has a problem of idle power.

With rising cost of fuel and reduced rate of increase in demand, a heavy financial burden now lies on Kenya Power, the country’s distribution utility.

KenGen, the top generating company, and other power producers increased their supply to Kenya Power to 1.058Billion kilowatt-hours (kWh) in March 2021, reports the Epra, a figure described by the, Business Daily Africa, the leading local financial newspaper, as an “all time high”.

“The March 2021 figure is an 11.8% rise from 946.09Million kWh that was supplied in the previous month and now jumps above the previous record supply that had been set last October”, the newspaper explains.

Business Daily Africa says that the spike in generation “exposedhomes and businesses to the burden of paying for idle electricity”amid depressed consumption. “Payments for idle electricity is a pass-on cost to consumers. The take-or-pay clause in contracts signed between government and power producers compels Kenya Power to buy the agreed amount of electricity regardless of whether or not the utility needs the energy”.

Kenya Power, the distribution company, has been struggling. In February 2021, it reported that revenue from the sale of electricity fell to $635Million (KSh69.014Billion) in the six months period that ended on December 31, 2020, compared to $641Million (KSh69.607 Billion) at the end of December 2019. Transmission and distribution costs dropped 19% to $17.2Million (KSh18.7Billion) from 212Million (KSh23Billion) in the corresponding half year period in 2019.

The March 2021 supply is for instance 41.5% higher than the 748.44Million kWh that Kenya Power sold to consumers in February 2021.

“The excess generation has been a major concern for Kenya Power, which has to pay for the electricity generated even when there is no market to sell it”, the daily concludes.


Nigeria’s Power Minister’s Bold Electricity Framework Stands on a Shaky Base

By Toyin Akinosho

Saleh Mamman, Nigeria’s Minister of Power, who has only spent close to 20 months in office, identifies liquidity issue as the most important challenge of the country’s electricity supply industry.

Nigeria generates around 5,000MW of electricity, which is inefficiently transmitted and poorly distributed.

Mamman has constructed a framework for the sector with, Infrastructure Alignment as the Number 1 focus. He wants to fix the infrastructure gap in Transmission and Distribution, by executing the Electrification Plan, which is, largely the Siemens Plan he met on the table.

That plan, which will cost around $2Billion aims to refurbishsome very important equipment and construct new ones, in order to deliver far more generated electricity than its being done now

Saleh’s second focus is a soft power item: Market Efficiency and Transparency..involving the refinement of the commercial technical, and regulatory components of transaction agreements; promoting fiscal discipline and effectively utilizing all sector loans (World Bank and Payment Assurance Facility) as well asenforcing market discipline and contract effectiveness by the regulator. 

This is the area that the private sector part of the chain -the Generating Companies (gencos) and the Distribution Companies (discos) -has seen the most cause to criticize government for not addressing. So, it has to be addressed.  But it can be far more challenging to deliver than building infrastructure and it is a perpetual work in progress. What it needs, for a start, is the high visibility of the Minister’s body language. And Saleh has shown a particularly good example. 

In a recent case he queried the changes to the minimum capacity quantities of two power plants: Olorunsogo and Omotosho, by the Transmission Company of Nigeria (TCN). He publicly criticised the company’s non-compliance with the rulings of the Nigeria Electricity Regulatory Commission (NERC)-arguing, forcefully that such attitude of a government owned company to the regulator, “poses not only operational challenges but also reputational implications for the sector, and by extension, the Federal Government”. Saleh directed that NERC’s rulings “should be obeyed”.

The Saleh Blueprint’s third thematic focus areaCorporate Governance/Sector Policy Coordination may come across as different from the second, but the way to address it is similar: largely by the Minister’s own body language. In fact, if Mamman Saleh forcefully backs the NERC as a regulator, and vigorously promotes its independence, NERC would have little reason to think it has to court the National Assembly (the parliament) for approval on any issue. The same way the Minister addressed the case of TCN versus NERC case, and came out courageously to respond to the National Assembly’s suggestion to postpone the idea of cost reflectivity, his interventions can send out positive message about law and order on several other interface issues.

 The Nigerian government has finally shown the politically will to allow a cost reflective electricity tariff, after significant pressure, ntably from the IMF..

The last two focus areas in Saleh’s Blueprint, are equally challenging: Increase Energy Accesswhich talks of extending the net of electricity offgrid and the Execution of Legacy Projects. These are two focus areas whose execution can readily slip because most of the work is outside the minister’s ready grasp. 

For the Increase in Energy Access, which in the framing in Saleh’s blueprint, is largely about renewables and minigrids, significant inflow of capital is required, outside those already committed to the Siemens Plan and the Pre-Siemens funding on Transmission infrastructure. It is true that the Minister’s success in other areas, especially Market Efficiency and Transparency and Governance, will help in unlocking the vault, but these things have to be happening around the same time, so some Big Bold New Idea has to be seen by the Renewables Community and Private Equity Funders and Development Financiers around the World.

Regarding the Legacy Projectsa lot is riding on trust by the investing community, because, truly, in the year 2021, the Nigerian state shouldn’t be funding, from the treasury, a mammoth project like the 3,500MW Mambila Plateau Hydroelectric power. Yes, if that community sees that the needle is moving in the right direction in terms of Market Efficiency (Focus area Number 2) and Governance (Focus area Number 3), they will show interest. But we still need to provide solid commercial case

That is why we argue Saleh Mamman’s framework has a bit of challenge in detail. 

I am not looking for nuts and bolts, but there is little inkling of what we can do differently to pull the likes of Mambilla, which will make a significant difference in generation capacity, even to communities not being served at the moment.

Nigeria’s BIG plan to unlock the suppressed generation capacity is the SIEMENS plan. But what are the equivalents of this idea for Renewable IPPs and the Legacy Projects? How do investors see clear line of sight to recouping their money?

We all know what happened about Renewables in South Africa between 2012 and 2015. The country was on the road to becoming one of the world’s largest renewable industries, without a single cent of government spend. And there were increasing localization achievements from Bid window to bid window -this was at government’s insistence and the investors were willing. Then (the power utility) Eskom started to talk down the commerciality and government, treating Eskom -as the be all and end all- made the mistake of listening too earnestly to Eskom. And all that investment dried up.

Finally, the Saleh Framework Plan is significant for what it says as it is for what it does not say.

One crucial thing it does not say is how the Ministry of Power will gain some handle on Gas to Power. I think that successive Power ministers have been too shy about demanding to understand the link between the reservoirs that geologists find, (and which engineers develop) and the Power Plants.

The mistake that is largely made is that “Oh: that broken link is a standard problem. Once it is fixed; everything will be alright. And the Ministry of Petroleum will fix it”.

No please, it’s a long, ongoing process of request, engagement, understanding, fixing, mitigation, all the time. 

And it is better for the Power Ministry to be fully attentive, with its own men, to the little details. Because, when you make those transmission and distribution gains after the Siemens Plan is implemented, you will find that you’d be struggling to get the gas to generate the power you thought was there ready to be generated.

Olusegun Obasanjo, Nigeria’s President from 1999 to 2007, used to superintend a monthly, fortnightly meeting with gas producers, who were invariably the major oil companies. He convinced two of them (ENI, Shell) to build a power plant each.Those are today, some of the country’s most reliable plants and they most readily receive natural gas in the country.

I believe that, with how far Nigeria has come, the least the Minister of Power could do is to insist on a monthly meeting with the Petroleum Ministry, and every company that has a Gas Processing Plant (not all have) and every company that supplies some molecules into those poorly maintained, gas pipelines.

This article was initially published in the November-December 2020 edition of Africa Oil+Gas Report

 


Nigeria: Siemens’ Infrastructure Upgrade will be Converted to Loan in Discos’ Balance Sheets

By John Oforiata Ankromah, in Abuja

The Nigerian government is spending more than $2Billion to fund the first phase of Siemens’ upgrade of transmission and disco infrastructure across the country.

This is called the Siemens presidential power initiative, after the German engineering contractor Siemens, who will see to the upgrade.

As the Electricity Distribution companies (DISCOSs), are mostly owned by the private sector, with a significant minority owned by the state, the government’s contract to Siemens for the upgrade is a huge investment into the entire DISCOS’ franchise.

The plan is that, after the completion of the upgrade, the Government’s total investment will be converted into a long-term shareholder loan, “which technically is a systematic way of capitalising the DISCOS without really giving them money that may not necessarily be used towards improving the infrastructure”, impeccable government sources tell Africa Oil+Gas Report.

In summary, the Nigerian government borrows money, uses the money in an integrated way to improve the entire electricity value chain, quantifies the amount that has been spent on every DISCO and then books the amount as a long-term convertible loan. Now, the DISCOS are expected to pay back that which has been lent.

But, can the loan be converted into equity?

Answer: The Nigerian Government is still thinking about that possibility.


GE Secures Contract to Equip Senegal’s 300MW Power Plant

By Macson Obojemuemoin, in Dakar

GE has secured an order to supply power generation equipment for what is potentially the largest power plant in Senegal.

The American power service provider says it will supply two 9E.03 gas turbines, one STF-A200 steam turbine, three A39 generators, two Heat Recovery Steam Generators (HRSG) and additional balance of plant equipment, under a contract signed with West African Energy.

The project is the Cap des Biches combined cycle gas turbine power plant, expected to generate 300 megawatts (MW), on completion, nearly 25% of the power consumed in Senegal and the equivalent electricity needed to power approximately 500,000 Senegalese homes.

What GE is servicing is an expansion. In 2016 ContourGlobal started generating electricity with a 53MW power plant on the same site.

“Cap des Biches Power Plant represents another opportunity to use gas-fired generators as an ideal complement to variable renewable resources because they can change power levels quickly, turn down to low levels when demand is lower, and start rapidly”, says Elisee Sezan, CEO for GE’s Gas Power business in Sub-Saharan Africa. “All of these attributes enable gas turbines to work in concert with renewables to maintain reliability in a power system. The plant will provide flexible power to Senegal and help improve the quality of people’s lives.”

In 2020, GE’s 9E gas turbine fleet celebrated 40 years of operations globally. It has a large installed base of over 650 units in the world located primarily in Asia, China, Europe, Africa, and the Middle East.

 


Tlou Looks for Money to Fund Botswana Power Project

By Bunmi Christiana Aduloju

Tlou Energy is currently seeking funding for development of the Lesedi Power Project in Botswana, with plans to develop gas and solar power generation assets with the sale of electricity into the regional power grid.

The London listed company claims it has completed formalities for a 2MW Power Purchase Agreement (PPA) with Botswana Power Corporation (BPC) and has received the signed PPA and Grid Connection Agreement.

The project covers an area of approximately 3,800 Km2 and consists of four Coal and Coal Bed Methane (CBM) Prospecting Licences (PL) and a Mining Licence (ML).  The Mining Licence area is currently the focal point for Tlou’s operations and includes the Lesedi production wells or ‘pods’.

“Tlou has the only independently certified CBM gas reserves in Botswana, with 252 Billion Cubic Feet (Bcf) of 3P gas reserves certified in the Lesedi project area”, the company claims.  “In addition, the 3C Contingent Gas Resources are approximately 3 Trillion Cubic Feet (Tcf)”.

Phase one involves transmission line construction, transformers, grid connection, electricity generators and potentially the drilling of additional gas wells. The ~100 Km transmission line will run from the Lesedi project to the town of Serowe where it will connect to the existing power grid. Initial generation is proposed to be up to 2MW of electricity. Funding required for phase one is ~ $10Million which can be staged if necessary or prudent to do so. “

Phase two funding is for the expansion of electricity generation up to 10MW. This will involve drilling more gas wells and the purchase of additional electricity generation assets. Funding required for phase two is ~ $20Million. Upon successful completion of phase one and two, the Company plans to expand the project beyond 10MW.

Funding discussions are progressing well, in particular with Botswana based institutions with which the Company is in ongoing discussions. Should technical and risk assessments on Tlou’s operations be successful, the relevant parties would then seek internal approval to proceed, followed by legal and other due diligence. If such approval is granted, which is currently expected towards the later end of Q1 2021, Tlou would then be in a position to announce further details of the proposed deal.

Tlou is also considering what further progress can be made at Lesedi prior to conclusion of any Botswana based finance. Activities could include the purchase of land for gas and solar development, preparatory work on transmission line infrastructure, and drilling operations. Undertaking this work in the near term and in advance of the conclusion of the ongoing discussions in Botswana could facilitate a more rapid development of the project – all subject to funding as well as any pandemic related restrictions that may be in place.

 


Mozambique’s 450MW Gasfired Power Plant Now Certain of Going Ahead

By Macson Obojemiummen

A substantial portion of the debt funding requirements have been secured for the Central Termica de Temane (CTT) power project in Mozambique.

CTT will receive funding of up to $200Million from the U.S. International Development Finance Corporation (DFC) and up to $50Million from the OPEC Fund for International Development (OPEC Fund) once execution of the loan agreements and other closing conditions have been finalised. The International Finance Corporation is expected to provide the balance of the required debt financing and is in the process of finalizing its approvals.

The technical solution for the project has also been finalised.  Through a competitive procurement process, the Spanish contractor, TSK, has been selected to design and construct the power plant, “which will use efficient and well-proven Siemens gas turbines”, Globeeq, a power developer, says  in a note. “TSK has extensive experience in designing similarly-sized combined-cycle power plants utilizing the Siemens turbines”.

The 450 MW gas-fired power project is located at Temane in Inhambane Province in Mozambique.

Originally developed by  Electricidade de Moçambique, E.P. (EDM)  and Sasol New Energy Holdings, Globeleq is lead developer along with its consortium partner, eleQtra in the Temane Energy Consortium (TEC).

The project will supply low cost, reliable power to EDM through a 25-year tolling agreement using natural gas supplied from the Pande-Temane fields operated by Sasol and ENH, the state-owned hydrocarbon company.  TEC will also provide support to EDM in the development of the Temane Transmission Project.

EDM selected TEC in December 2017 as part of a competitive bidding process. “EDM chose the consortium due to its experience developing and operating gas-fired power projects; competitive cost of capital; and ability to deliver the most competitive tariff”, Globeleq claims in a release.

A joint development agreement was signed on 20 June, 2018 to progress the development of the project and bring it to financial close.

On 28 August, 2019, the Government of Mozambique signed financing documents for the Temane Regional Energy Project.

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