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Gas power plant adds to Moz energy mix

FAZEL MOOSA
The benefit of any form of infrastructure is the value that it adds to the community around it

FAZEL MOOSA The benefit of any form of infrastructure is the value that it adds to the community around it

12th December 2014

By: Pimani Baloyi

Creamer Media Writer

  

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Financial services provider Investec says it has gained invaluable experience through its funding of a Mozambique power generation project, the Kuvaninga Energia project, which reached financial close in December 2013 and is scheduled for commercial operation in the fourth quarter of 2015. The project will supply electricity to Mozambique power utility Electricidade de Macambique (EDM).

Investec Power and Infrastructure Finance Africa head Fazel Moosa tells Engineering News the Kuvaninga project has provided Investec with an in-depth understanding of the regulatory and legislative framework in Mozambique, in addition to first-hand knowledge of the power sector and its role-players.

He says the bank is exploring other power generation initiatives in Ghana, Tanzania, Kenya, Namibia, Botswana and South Africa.

“The bank aims to apply the expertise it has gained in the power sector globally to fund power generation initiatives in sub-Saharan Africa. Many countries on the continent are caught between economic growth requiring power infrastructure establishment and currently being unable to afford large-scale investments,” he details.

Moosa adds that Investec’s approach has been to identify small to medium-size manageable initiatives, which assist governments in establishing new power generation capacity without incurring large contingent liabilities.

Thus far, Investec has invested in six power generation projects in Africa with a combined investment value in excess of R20-billion. Five of the projects are in South Africa and the sixth is the Kuvaninga project.

Additionally, the bank has held a variety of advisory mandates throughout sub-Saharan Africa, specifically in Mauritius, the Democratic Republic of Congo, Nigeria, Malawi, Namibia and Kenya.

Kuvaninga has been established for the ownership, construction and operation of a 40.29 MW gas-fired power plant near the town of Chokwé, north of Maputo, in Gaza province. The plant will use gas engines manufacturer GE Jenbacher’s reciprocating engines and is being constructed by diversified construction, infrastructure concessions and related services company Group Five International.

It will be operated by project management company ADC Projects and supported by a preventive maintenance agreement with energy services provider Clarke Energy.

The plant will be located alongside the natural gas pipeline, co-owned by petroleum company Sasol and the government of Moçambique. The project includes a 7 km, 110 kV transmission line to transport power from the plant to the nearest interconnection point on the EDM electricity supply grid, the Lionde-Mapai line.

According to an agreement between the plant owner and EDM, the State utility will supply gas to Kuvaninga for conversion into power, which will then be supplied to the regional electricity grid. EDM is the sole offtaker for the electricity generated, with 100% of generation capacity targeted for consumption in Mozambique.

Under the agreement with EDM, the plant owner will construct, own and operate the plant for 16 years, after which the plant will be handed over to the EDM.

Moosa explains that the Kuvaninga project demonstrates the bank’s pioneering and entrepreneurial approach to creating innovative and flexible solutions. The plant has been in development for four years and is the first power project in Mozambique financed on a limited recourse and project finance basis, with EDM as the sole offtaker.

“A strong contributing factor towards taking on the challenge was the recognised support and commitment from EDM, our codevelopers and our local partners in Mozambique, which helped immensely in navigating the sector and environment,” he mentions.

Empowerment Initiatives
Moosa further states that Investec is committed to improving the lives of communities.

He notes that local communities in the area around the Kuvaninga power plant expressed a need for improved water resources, for which the partners of Kuvaninga have allocated a budget to implement social projects, such as supplying well bores, photovoltaic water pumping and storage tanks, establishing a water distribution system that serves the local residents and the refurbishment of community buildings such as schools and infirmaries.

In addition, a budget has been allocated for the duration of the operating life cycle of the plant to maintain these facilities and pursue further community-related projects.

Edited by Megan van Wyngaardt
Creamer Media Contributing Editor Online

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