Sunday, September 27, 2020

SADC power sector investors meet in Livingstone for possible financing

A number of power sector investors are meeting this week in the Zambian tourism resort of Livingstone to discuss possible participation in the financing of energy projects that are in the offing in the SADC region.

This week, Ponatshego Kedikilwe, the minister of Minerals, Energy and Water Resources, led a Botswana delegation to the roundtable that will attract financiers from 15 states.

The ministry of Minerals, Energy and Water Resources officials said this week that the aim of the roundtable is to obtain sound interest and, possibly, firm commitment from investors on some of the projects that could reach financial closure in the coming two years.

The roundtable is co-hosted by the SADC secretariat and South African Power Pool (SAPP) and the Regional Electricity Regulators Association (RERA).

“The secretariat has selected a small number of projects from the list of Priority Generation and Transmition Projects which fulfill the criteria,” stated the ministry in a statement.

Some mega projects that are giving the region a headache include the Mmamabula Energy Project (MEP) and Westcor that will source its power from the largest river in the DRC.

Last week, the Chief Executive Officer of Westcor Dr. Pat Naidoo told Sunday Standard that they have completed a Desktop study, which points to a highly promising project, technically, economically and financially.

Naidoo stated that basing on the findings of the study, it can be confidently stated that Southern Africa is on the way to become the energy intensive valley of the world, to the extent that original equipment manufacturers and energy intensive mining and other powerful industry operations, will be compelled to relocate to the region.

CIC Energy, the promoters of Mmamabula Energy Project also stated recently that they have submitted formal bids to Eskom and Botswana Power Corporation (BPC) for power purchasing proposals.

Mmamabula is expected to cost US $ 3 billion or over P21 billion for its revised Phase 1.

The SADC Power Sector Investors Roundtable was expected to attract a good number of representatives from different members’ states including Angola, DRC, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe.
Meanwhile, www.inet.co.za website has reported that international investors have bemoaned delays in crucial power generation projects caused by bureaucratic and political indecisiveness, saying these had hindered economic growth in most of Africa’s economic communities.

The southern African representative of the European Investment Bank, David White, said at the Southern African Development Community (SADC) Power Sector Investors’ roundtable discussion in Livingstone, Zambia, that most of the power stations and transmission corridor projects presented to funders had been conceived and the groundwork done more than 20 years ago.

White said cross-border projects held the key to regional growth and that the European Union and many world institutions were behind regional infrastructure development proposals because of their potential economic effect. He also urged governments to factor into their proposals the projected maintenance costs to ensure that the infrastructure did not stagnate five years later.

Development Bank of Southern Africa (DBSA) principal investment officer Lyson Muwila said the bank had identified a lack of capacity in some countries to present a properly packaged proposal for a project once the necessary groundwork had been done.

It was now beginning to offer technical assistance to help provide potential funders with answers to their questions about the viability of a project.
Principal project manager, Christine Schmidt, of the German Development Bank (kFW) said a number of funders were beginning to focus on green and renewable energy projects such as hydroelectric power station construction.

She said the kFW was keen to fund cross-border projects, especially transmission lines across southern Africa. These included corridors to carry electricity from Zambia to Tanzania and Kenya; from Cahora Bassa to SA in the Mozambican Backbone Corridor; and to Zambia, Zimbabwe, Botswana and Namibia.

Schmidt said the kFW had engaged the DBSA to offer its facilities for the funding of the transmission lines. Although no figures had been tabled, these were expected to be finalised this week, and she said the German government was particularly interested in projects that would meet the region’s electricity supply challenges.
She urged SADC parastatals responsible for electricity provision to work hard to improve their balance sheets and management and make operations more efficient.

Zambian electricity utility (Zesco) CEO Lemba Nyirenda called on political leaders to delink the provision of electricity from politics. He said it was no longer possible to promise cheap electricity to voters compared to the cost of production.

He acknowledged that SADC countries were facing rural development and poverty alleviation challenges. He argued that a country’s desire to uplift its people should be balanced with its ability to afford the costs. (Additional reporting by www.inet.co.za)

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Sunday Standard September 27 – 3 October

Digital copy of Sunday Standard issue of September 27 - 3 October, 2020.