In line with its fast-growing economy and abundance of natural resources, Mozambique is becoming a darling for energy-hungry countries and the corporates who mine that energy. According to Alastair Campbell, Standard Bank’s executive vice-president for mining, energy and infrastructure finance, large international utilities are taking a keen interest in the 1 500MW MphandaNkuwa hydropower project in Mozambique.The interest from large utilities is likely to alter the make-up of the equity partners in the project.
Standard Bank is the financial adviser on the project. At the moment, the shareholders are Brazilian construction group Camargo Corrêa (35%), Mozambican company Energia Capital (35%) and Mozambique’s national electricity utility, Electricidade de Moçambique (EDM) with a 30% interest. The project is significant for South Africa because some 80 to 90% of its output will in all probability be bought by Eskom, with EDM buying the remaining 10 to 20%. South Africa’s integrated resource plan for electricity (IRP2010) makes provision for 3 349MW of imported hydro, with 360MW anticipated in 2020.The project is due for commissioning in either 2017 or 2018, according to Mozambique’s energy ministry.
Campbell said this week that the companies with an active interest in the project were from South America, Europe and the Far East.
The plant, estimated at US$4 billion (R32 billion), will consist of four turbines of 375MW each; and 870MW of the capacity from the project is so-called firm power, referring the amount of energy available for production or transmission that can be guaranteed to be available at a given time.
Eskom imports power from the CahoraBassa hydroelectric power station in Mozambique and once the MphandaNkuwa project has been commissioned it will open up the way for the Hydro CahoraBassa north bank project to be developed. This would add a further 1 800MW to the grid and together both projects would contribute in a significant way to the alleviation of the electricity shortages in Southern Africa.
