Keen interest in new Mozambican hydropower project

Standard Bank is the financial adviser on the project. The interest from large utilities is likely to alter the make-up of the equity partners in 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 SA because 80%-90% of its output will in all probability be bought by Eskom‚ with EDM buying the remaining 10%-20%. SA'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 on Tuesday that the companies with an active interest in the project were from South America‚ Europe and the Far East.

The plant‚ estimated to cost about $4bn‚ will consist of four turbines of 375MW each; 870MW of the capacity from the project is so-called firm power‚ referring to the amount of energy available for production or transmission that can be guaranteed to be available at a given time.

Campbell said the Mozambican hydro project was well suited in relation to SA.

Eskom imports power from the Cahora Bassa hydroelectric power station in Mozambique and once the Mphanda Nkuwa project has been commissioned it will open up the way for the Hydro Cahora Bassa 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‚ he said.

The IRP2010 document said importing electricity from a new hydro project would require an upgrade in transmission infrastructure.

Power and automation technology group ABB this week announced that it had won an order worth about $50m from Hidroeléctrica de Cahora Bassa to refurbish the Songo high-voltage direct current converter station in Mozambique.

The converter station and associated high-power equipment are key components in the 1‚920MW high-voltage direct current converter link transmitting clean hydropower from the Cahora Bassa hydro plant over 1‚417km to the grid in SA.

The refurbishment project entailed replacement of key equipment‚ including high-voltage transformers and direct current (DC) smoothing reactors‚ ABB said.