Southern African News Features                                           SANF 09 No 11, March 2010
SADC takes investment drive to Europe for energy sector
by Kizito Sikuka

Southern Africa could get a major boost towards implementation of some of its key energy generation and transmissions projects as it takes its investment promotion to the Energy Infrastructure Development Conference 2010 that has opened in Frankfurt, Germany.

The investment conference is a joint initiative of the Southern African Development Community (SADC) and the Southern Africa Initiative of German Business (SAFRI).

Member State utilities through the Southern African Power Pool (SAPP) have identified a number of priority projects for commissioning over the next few years to address the crippling energy situation in the region.

Between 2009 and 2013, for example, SAPP expects member utilities to commission projects that would add about 8, 800 Megawatts (MW) of electricity to the regional grid, allowing the region to match supply and demand.

However, the lead time for most power generation projects is long. In fact, five to seven years are needed from the day when the soil is turned on the project site to the day when an electricity user can switch on the light on the other end.

As such, SAPPís planning horizon stretches to 2020 and beyond when most projects starting now would be ready if they go according to plan. Thus the projects that would be ready by 2013 ought to have started by now.

Yet the unavailability of funds among other challenges has continued to hamper the implementation process.

To ensure the targets are met and projects get back on track, southern Africa has been actively involved in attracting investment into the energy sector.

At the Frankfurt investment conference, the region is expected to present as many as 15 existing and new energy projects to investors for possible funding.

Among them, the Mphanda Nkuwa hydro power project in Mozambique, Itezhi Tezhi hydro power in Zambia, Kudu gas power project in Namibia, Mmamabula coal power project in Botswana and the Medupi / Kusile power projects in South Africa will be presented to investors, according to the conference programme.

Transmission projects to be showcased at the conference include the NamPower Caprivi link in Namibia, Mozambique transmission backbone and the Zimbabwe-Zambia-Botswana-Namibia (ZIZABONA) transmission project.

Clean Development Mechanism (CDM) projects that are rapidly emerging as some of the most lucrative sources of "carbon financing" will also be presented at the conference.

These are the NamPower Concentrating Solar Power (CSP), wind power projects in Namibia and the Eskom CSP projects in South Africa.

CDM projects result in less carbon emissions and do not heavily pollute the environment as compared to other forms of energy such as coal.

Based on an analysis by SADC, a total of 19,000 MW worth of generation projects could be commissioned under the CDM in the region, and are therefore seeking funding.

The projects to be presented at the conference are among some of the major energy projects that could solve SADCís current energy shortages if implemented on time.

The Mphanda Nkuwa power plant, for example, has the potential to produce about 1,500 MW of electricity while the ZIZABONA transmission line has the capacity to feed more power to the SAPP regional power grid.

SAPP is a 12-member regional body that coordinates the planning, generation, transmission and marketing of electricity on behalf of Member State utilities in SADC.

The power utilities in mainland SADC, with the exception of Angola, Malawi and the United Republic of Tanzania, are interconnected through SAPP, allowing them to sell electricity to one another through a competitive market.

SAPP has said that extensive investment in generation and transmission grids as well as other key energy infrastructure is crucial for southern Africa in its bid to ensure energy security.

The SADC region has been experiencing power shortages dating as far back as 2006 due to a combination of factors including the diminishing generation surplus capacity against increasing growth in demand.

Member States also did not act fast enough to boost generation capacity despite warnings of impeding shortages that came as early as 1999.

The current shortages are despite the enormous generation potential that exist in the region ranging from hydro, wind, gas to solar power.

The SADC Energy Infrastructure Development Conference set for 4-5 March in Frankfurt is being coordinated on behalf of Member States by the SADC Secretariat with support from the SADC Ambassadors Group in Germany.

SAFRI together with various Germany financiers such as the Germany Development Bank (kFW) is funding the conference.

SAFRI holds similar conferences on infrastructure development annually and the focus for this year is on energy.

Regional utilities as well as other relevant stakeholders such as SAPP, the Regional Electricity Regulators Association of Southern Africa (RERA) and the Development Bank Southern Africa (DBSA) are taking part in the conference. Southern African News Features offers a reliable source of regional information and analysis on the Southern African Development Community, and is provided as a service to the SADC region.

This article may be reproduced with credit to the author and publisher.

SANF is produced by the Southern African Research and Documentation Centre (SARDC), which has monitored regional developments since 1985

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