19 July 2012

Mozambique: Guebuza Inaugurates Gas-Fired Power Station

Maputo — Mozambican President Armando Guebuza on Wednesday inaugurated a gas-fired power station, capable of generating 107.5 megawatts of electricity, at Ressano Garcia, on the border with South Africa.

The natural gas comes from the Pande and Temane fields in Inhambane province, which are operated by the South African petro-chemical giant Sasol. Most of the gas is exported, via a pipeline, to the Sasol industries in the South African city of Secunda. A spur from the pipeline takes some of Mozambique's royalty gas, provided under the contract with Sasol, to the power station.

The power station is operated by the British company Aggreko, which has invested 80 million US dollars in the project, in a joint venture with the South African Shanduka Group. Aggreko has a 70 per cent stake in the power station, and Shanduka the remaining 30 per cent.

Aggreko describes itself as the world's largest temporary power generation company, and is a major supplier of temperature control equipment. Shanduka is an investment holding company, set up by Cyril Ramaphosa, once the leader of South Africa's National Union of Mineworkers (NUM), and a senior figure in the ruling African National Congress (ANC).

The power station will sell 15 megawatts to the Mozambican electricity company EDM, while the South African power utility, Eskom, will purchase the remaining 92.5 megawatts.

Currently, EDM has 369 megawatts, generated at the Cahora Bassa dam, available to supply southern Mozambique. This amount has proved insufficient for domestic consumption, hence the regular power cuts and oscillations in current that have plagued consumers. The extra 15 megawatts means that EDM will now have 384 megawatts to supply Maputo, Gaza and Inhambane provinces. It is hoped that this will stabilize power supplies, and reduce the number of power cuts.

In addition to the power station proper, the investment covers a 1.2 kilometre high pressure gas pipeline, branching off the main SASOL pipeline, gas processing and depressurizing infrastructures, 1.5 kilometres of 275 kv transmission line, and a main sub-station. Construction took only 14 weeks.

Other gas-fired power stations are planned - a second in Ressano Garcia will generate 160 megawatts, and one in Chokwe, in the Limpopo Valley is planned to produce 140 megawatts. Both should be operational in 2014.

At the inauguration ceremony, Guebuza declared that Ressano Garcia will become "one of the great centres of energy production in the country and in the region".

The new power station was "an important step in social and economic development, intended to boost the welfare of Mozambicans, through maximising the benefits associated with natural resources, particularly the energy resources which give Mozambique a privileged world position", Guebuza declared.

He stressed that the availability of electricity is fundamental for attracting investments. That power should also be reliable and of good quality which depended, not only on generation, but on efficient transmission.

He urged all citizens to prevent and fight against the vandalism and theft of electrical components which has plagued EDM in recent years.

Guebuza stressed that the availability of safe and reliable electricity was key for the development of agro-industries that would improve food and nutritional security and create jobs. Similarly, electricity was a sine qua non for improving health, education and water supply services.

He added that the discoveries of vast deposits of natural gas and of coal will become "preponderant factors" in the industrialisation of Mozambique. The construction of a new transmission line from the Zambezi Valley to the south (the so-called "backbone" of the national grid) and more projects to generate electricity from coal and gas would not only guarantee power for other parts of Mozambique, but could supply other southern African countries "where the availability of electricity has become critical in recent years".

Cited in an Aggreko release, Ramaphosa said that although this was a "temporary solution" to the needs of South Africa and Mozambique, the Ressano Garcia power station provided a model for public-private partnership and cross-border collaboration that could be used as a benchmark for future ventures.

Brian Dames, chief executive of Eskom, said Eskom was pleased that it would be receiving additional power from the project. "Our relationship with Mozambique is very important to Eskom, and we are keen to see more cross-border projects in the region," he added.

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