Gas-fired Plants To Power Mozambique & Southern Africa

Aggreko, along with its joint-venture partner Shanduka Group, has signed a Power Purchase Agreement (PPA) with Eskom, the South African power utility, and agreed PPA terms with Electricidade de Moèambique (EDM), the Mozambique power utility, to provide a 107 MW natural gas-fired power plant that will supply baseload and peak power to both companies.

Both PPAs are subject to the parties fulfilling a number of conditions before becoming effective.

The power plant will be situated on the Mozambique / South African border at Ressano Garcia, 90 kilometres north-west of Maputo. It will be powered by natural gas from the Temane gas fields in Mozambique and its output will be injected into the national grid of Mozambique on site at Ressano Garcia. The output of the plant will be split between the two companies, with EDM utilizing 15 MW and Eskom 92 MW.

This is thought to be the first project by a private company to supply power cross-border to two utilities in Southern Africa, and underlines the potential benefits that can accrue to countries sharing resources. Both countries will get much needed additional power, and the project also underlines the importance of Mozambique as an energy hub for the entire Southern African region.

It is planned that the plant will start operations early in the third quarter of 2012, and supply power until July 2014. Aggreko is responsible for building gas interconnections, a major substation and 1.5 kilometres of 275 kV transmission line working alongside the Matola Gas Company SA and Gigawatt Mozambique SA. The total value of the project is likely to be in the region of $250 million over two years, including fuel costs.

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Rupert Soames, Chief Executive of Aggreko said, "This is a very important project for Aggreko, and for Southern Africa, as it underlines the benefits of countries working together for the common good. We hope it will be a pathfinder for other countries seeking to make the most of their resources to optimise the supply of power across the region."

"The partnership with Aggreko creates an opportunity for Shanduka to contribute to the Southern Africa Power Pool. This unique project will contribute to the provision of a reliable power supply and support South Africa in meeting its energy needs" said Phuti Mahanyele, CEO, Shanduka Group.

Speaking for EDM, CEO, Augusto Sousa Fernando added, "EDM, in its role as the national power utility and system operator in Mozambique, welcomes the Aggreko interim power plant in Ressano Garcia at Maputo Province and will provide the support required to make it a reality and to ensure that the energy to be generated by the project contributes to the construction of our future in Mozambique and supports the socio-economic development in the SADC region as well".

Hilary Joffe, Eskom spokesperson said, "We are very supportive of this innovative cross-border project, and we look forward to the Ressano Garcia Plant coming on line early in the third quarter."