The SADC region has prioritized energy as the key to development, and has moved rapidly in a number of areas to strengthen capacity in a region where demand is annually outstripping the growth in supply.

The most significant development to date has been the rapid evolution of the Western Power Corridor.

The project, based on the largely untapped capacity of the Inga river in the Democratic Republic of Congo (DRC), is expected to generate initially about 3,500 megawatts, sufficient to supply four other countries.

A company to operate the US$4.5 billion project will be formed by the power utilities of Angola, Botswana, Namibia, South Africa and the DRC, after the signing of a stakeholders agreement in December.

The rapid development of the project follows the approval in October by Ministers of Energy and the chief executives of utilities in the five countries. The electricity demand in the region is likely to continue expanding in 2005.

The company to be established will be located in Botswana and will be the first of its kind on the continent. Each participating country will own a 20 percent stake.

The proposed company would own the infrastructure, dams, power stations and cables running from the DRC through the other countries.

Private sector participation and financing will be invited for the construction and operations of the project, which is expected to be completed in the next six or seven years.

A feasibility study financed through a contribution of US$100,000 from each of the five countries, as well as an environmental impact assessment, and a study of legal and financial viability, will be produced in 2005.

The participating governments have agreed to harmonise legislation to facilitate the movement of people and goods related to the ambitious project.

The project is driven from the New Partnership for Africa’s Development (NEPAD) unit of Eskom, the South African power utility.

The project could develop in future into the Grand Inga project with the potential to generate sufficient power to supply to the rest of the continent.

The Inter-governmental Memorandum of Understanding (MOU) establishing the Western Power Corridor was approved by the SADC Integrated Committee of Ministers in July 2003.

“The regional energy situation has remained static over the past 12 months on the supply side,” the SADC Executive Secretary, Dr Prega Ramsamy, said at year end. “However, on the demand side, the region has registered a steady increase in the traded energy through the short term energy market established and managed by the Southern Africa Power Pool Co-ordination Centre.”

A major development on the other side of the region is the restructuring of ownership of the giant Cahora Bassa dam project in Mozambique, constructed while Mozambique was still under Portuguese colonial rule, initially to supply electricity to South Africa at preferential rates, and owned largely by the government of Portugal. HCB also sells 500 megawatts of power to neighbouring Zimbabwe, at a higher tariff.

Delegations from Mozambique and Portugal have been holding consultations to discuss the framework for a transfer of ownership of Cabora Bassa Hydroelectric (HCB), the company that operates the dam on the Zambezi river in central Mozambique.

The delegations are tasked with establishing a “reasonable figure” for the HCB debt to the Portuguese treasury, which owns 82 percent of the shares while Mozambique has the remaining 18 percent.

An extensive debt was accumulated by the company during the 15 years when the dam was unable to operate and generate income, due to sabotage by apartheid South Africa and a local rebel group, Renamo.

Portugal calculates the debt at over two billion US dollars but Mozambique argues that is unpayable. The parties are trying to reach agreement on a reasonable figure for the debt and establish a financial syndicate to liquidate the debt as cheaply as possible.