SAPP Priority Projects for Investor Consideration

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SAPP Priority Projects for Investor
Consideration Funding
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CONTENTS

1. BACKGROUND
2. SELECTION CRITERIA
3. SAPP PRIORITY PROJECTS
4. LONG-TERM PROJECTS
5. STRATEGIC CONSIDERATIONS
6. CONCLUSION

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1. BACKGROUND

• The demand for power in Southern African is
  increasing at a rate of about 3 per annum due to
  increased economic activities resulting in
  diminishing generation surplus capacity.
• Investment in both generation and transmission
  infrastructure is required to copy with increased
  demand. The expected benefits would include
• Increased economic activities in the region
• Job creation and poverty reduction
• Technology transfer and capacity building
• SAPP has formulated Project Listing which is
  expected to act as a project guideline to
  Investors, Public Private Sector Participation.
• This presentation ends with a listing of the SAPP
  priority projects for investor consideration and
  financing.

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1. SELECTION CRITERIA

• 7 key aspects were considered as follows
• Size of the project MW
• Levelised costs USD/MWh
• Transmission integration
• Economic impact
• Percentage off-take committed PPA, MoU, etc
• Regional contribution as a percent of project
  capacity
• Number of participating countries

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• Notes
• Risk assessment - African Leaders are addressing
  the perceived country risks of doing business
  in Africa via the NEPAD initiative.
• Capital cost - When hydro projects are compared
  to either gas or coal fired projects, the initial
  capital cost for a hydro is high, yet the
  levelised cost over a period of time, say 20
  years, is lower.
• Environmental Impact Assessment (EIA) and
  feasibility studies are key aspects to be
  considered in project selection and listing.

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1. SAPP PRIORITY PROJECTS

• The SAPP priority projects are as follows
• Rehabilitation associated transmission projects
• Short-term generation projects
• Expected to be commissioned by 2010
• Completed feasibility studies
• Approved Environmental Impact Assessment
• Transmission projects aimed at interconnecting
  non-operating members

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3.1 Rehabilitation Projects
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• The above transmission projects are essential to
  support rehabilitation projects
• Reduce congestion
• Evacuation of power to load centre

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3.2 Short-Term Generation Projects
NG New generation
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3.3 Country Capacity Contribution
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• 3.4 Transmission Projects
• Transmission projects are classified as follows
• Outstanding transmission interconnectors whose
  aim is to interconnect non-operating members of
  the SAPP to the SAPP grid
• Malawi-Mozambique interconnector,
• Zambia-Tanzania-Kenya Interconnector, and
• Westcor project.
• Transmission interconnectors aimed at relieving
  congestion on the SAPP grid, and
• New transmission interconnectors aimed to
  evacuate power from generating stations to the
  load centres.

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3.5 Summary of Transmission Projects - 1
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3.5 Summary of Transmission Projects - 2
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1. LONG-TERM GENERATION PROJECTS

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1. STRATEGIC CONSIDERATIONS

• The following factors were considered in the
  strategic analysis
• Fuel diversity (coal, gas or hydro) - A check
  that not only one technology is built, but a
  variety to ensure that the risk is adequately
  spread.
• Geographical spread of the projects - A check to
  reduce the risk of having most projects in one
  country.
• Reserve margin requirements - Ensure that no over
  capacity or under investment occurs

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Committed Generation Projects only commissioned
65000
60000
55000
MW
50000
45000
40000
35000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Year
Capacity Planned
Peak Demand with DSM Reserve
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Committed Rehabilitation only
72000
68000
64000
60000
56000
MW
52000
48000
44000
40000
36000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Year
Capacity Planned
Peak Demand with DSM Reserve
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Committed - Rehabilitation - Short Term
72000
68000
64000
60000
MW
56000
52000
48000
44000
40000
36000
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Year
Capacity Planned
Peak Demand with DSM Reserve
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1. CONCLUSION

• The demand in SAPP is increasing at an average
  rate of 3 per annum as a result of
• Increased economic activity
• Establishment of energy intensive users
• Electrification programs
• As a result the region needs investments in both
  generation and transmission infrastructure.
• To avoid generation deficit
• Some projects are currently in progress
• SAPP has developed plans for rehabilitation and
  expansion of existing plants.
• SAPP has come up with plans for short term and
  long term generation and transmission projects.
• Funding is therefore needed for project
  implementations.

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THANK YOU