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SAPP Priority Projects for Investor Consideration & Funding 1 SOUTHERN AFRICAN POWER POOL CONTENTS 1. BACKGROUND 2. SELECTION CRITERIA 3. SAPP PRIORITY PROJECTS 4. LONG-TERM PROJECTS 5. STRATEGIC CONSIDERATIONS 6. CONCLUSION 2 SOUTHERN AFRICAN POWER POOL 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: 3 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. SOUTHERN AFRICAN POWER POOL SAPP Projects currently in progress Country Project Name South Africa South Africa Zambia Zambia South Africa South Africa Swaziland Zambia Zambia Angola Angola South Africa South Africa South Africa South Africa Zambia Zambia ESKOM_ Camden ESKOM_ Arnot Kafue Upper expand Kariba North Refurbishment ESKOM_ Arnot ESKOM_ Camden Maguga Kafue Upper expansion Kariba North Refurbishment Capanda Units 3 & 4 Lobito ESKOM_ Arnot ESKOM_ Camden ESKOM_ Grootvlei Open Cycle Gas Turbine Kafue Upper expansion Kariba North Refurbishment TOTAL R = Rehabilitation, Capacity [MW] Type 380 20 30 30 40 380 20 30 30 260 83 40 570 188 1050 30 30 Coal Coal Hydro Hydro Coal Coal Hydro Hydro Hydro Hydro Gas Coal Coal Coal OCGT Hydro Hydro Estimated Expected Feasibility Project Commissioning S tudy Cost US D Year Complete [M] 2005 2005 2005 2005 2006 2006 2006 2006 2006 2007 2007 2007 2007 2007 2007 2007 2007 3,211 Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes 80 4.4 20 20 25 80 30 20 20 344 25 120 105 477 20 20 Category R R R R R R NG R R NG NG R R R NG R R 1,410 NG= New generation NOTE: Above projects not subjected to a selection criteria 4 SOUTHERN AFRICAN POWER POOL 2. 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 7. Number of participating countries 1. 2. 3. 4. 5. 6. 5 SOUTHERN AFRICAN POWER POOL Notes: 1. Risk assessment - African Leaders are addressing the perceived “country risks” of doing business in Africa via the NEPAD initiative. 2. 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. 3. Environmental Impact Assessment (EIA) and feasibility studies are key aspects to be considered in project selection and listing. 6 SOUTHERN AFRICAN POWER POOL Item No Weight % 1 Weak 2 3 4 Below Standard Above Standard Standard 5 Best 1 Size of Project, MW 15 <50 50-200 200-500 500-1000 >1000 2 Levelised costs in Country (Including Transmission Lines), USD/MWh 25 >=50 43 - 49 36 - 42 29 –35 <=28 3 7 Key Aspects Transmission integration aspects/stability/ technology 10 >750km 101750km 50-100 Mainlykm <50km national Balance Little impact between impact, National jobs, regional limited to impact >GDP and and small only -jobs, some national area >GDP regional impact Existing infrastruc ture, plug in Mainly regional impact jobs, > GDP 4 Economic impact 10 5 15 <20 21 - 35 36 - 50 51 - 80 >80 6 Percentage off-take committed Regional contribution as a % of project capacity (Including import replacement) 15 <20 21 - 35 36 - 50 51 - 80 >80 7 Number of participating member countries 10 1 1 2 3 3 SOUTHERN AFRICAN POWER POOL 3. SAPP PRIORITY PROJECTS The SAPP priority projects are as follows: 8 1. Rehabilitation & associated transmission projects 2. Short-term generation projects Expected to be commissioned by 2010 Completed feasibility studies Approved Environmental Impact Assessment 3. Transmission projects aimed at interconnecting non-operating members SOUTHERN AFRICAN POWER POOL 3.1 Rehabilitation Projects Country Project Name DRC Zimbabwe DRC DRC Malawi Angola DRC DRC Inga-1 Refurbish Hwange Rehabilitation Inga-2 Refurbish Koni Tedzani 1 &2 Gove Nzilo Nseke Mavuzi & Chicamba Mozambique DRC Zongo DRC Mwadingusha DRC Sanga TOTAL 9 Expected Feasibility Estimated Commission Study Project Cost ing Year Complete USD [M] Capacity [MW] Type 110 80 486 42 40 60 27 62 Hydro Coal Hydro Hydro Hydro Hydro Hydro Hydro 2007 2007 2008 2008 2008 2008 2009 2009 Yes Yes Yes Yes Yes Yes Yes Yes 78 30 160 15 12 58 28 56 No No No No No No No No 34 24 62 8 Hydro Hydro Hydro Hydro 2009 2010 2010 2010 Yes Yes Yes Yes 30 20 30 6 No No No No 1048 Funding Availability 523 SOUTHERN AFRICAN POWER POOL TRANSMISSION INTEGRATION PROJECTS FOR GENERATION REHABILITATION Interconnector Description MW Feasibility Cost Year Status Study USD[M] Country Triangle - Orange Grove 330 kV line & Substation Second Alaska - Sherwood 330 kV line Hwange - Livingstone -Kafue 330 /220 kV Zambia -Namibia HVDC (220 kV DC) Livingstone - Katima Mulilo 220kV 2nd line Kolwezi - Solwezi 330 kV DRC Reinforcement (2x 500 kV DC Inga-Kolwezi) Karavia - Luano 330 kV Second ZESA -Eskom 420kV line 650 650 650 200 300 800 840 600 2007 2008 2008 2008 2009 2009 2010 2009 NTC NTC NTC NT NT NT NT NT Yes No No Yes Yes No Yes No 49.2 15.5 42.5 220 45 25 170 93 Zimbabwe Zimbabwe Zimbabwe /Zambia Zambia, Namibia Zambia, Namibia DRC, Zambia DRC DRC, Zambia 650 2008 NT Yes 46.1 Zimbabwe, RSA Total 706.3 The above transmission projects are essential to support rehabilitation projects: 1. Reduce congestion 2. Evacuation of power to load centre 10 SOUTHERN AFRICAN POWER POOL 3.2 Short-Term Generation Projects SHORT-TERM GENERATION PROJECTS (2005-2010) Capacity [MW] Type Expected Commissioni ng Year Feasibility Study Complete Estimated Project Cost USD [M] Funding Availability Category Country Project Name Tanzania Ubungo 60 Gas 2006 Yes 45 N NG Zimbabwe Zambia Gairezi Hydro Generation Itezhi-Tezhi 35 120 Hydro Hydro 2007 2008 Yes Yes 35 142 N N NG NG Zambia Kariba North Bank Extension 360 Hydro 2009 Yes 192 N NG Zimbabwe Kariba South Extension 300 Hydro 2009 Yes 200 N NG Zimbabwe Hwange Expansion 600 Coal 2009 Yes 500 N NG Malawi Kaphichira Phase-2 64 Hydro 2009 Yes 50 N NG Mozambique Massingir 28 Hydro 2009 Yes 55 N NG Zambia Kafue Gorge Lower 600 Hydro 2010 Yes 600 N NG Botswana Morupule Expansion 400 Coal 2010 Yes 600 N NG Mozambique HCB North Bank 850 Hydro 2010 Yes 771 N NG Namibia 800 Gas 2010 Yes 640 N NG Kudu TOTAL 4217 3830 NG= New generation 11 SOUTHERN AFRICAN POWER POOL 3.3 Country Capacity Contribution REHABILITATION & SHORT TERM PROJECTS 12 Country Capacity, MW % Angola 60 Botswana GENERATION PROJECTS IN PROGRESS 1.1% Country Angola Capacity, MW 343 % 7.4% 400 7.6% South Africa 4098 88.3% DRC 834 15.8% Swaziland 20 0.4% Malawi 104 2.0% Zambia 180 3.9% Mozambique 912 17.3% TOTAL 4641 Namibia 800 15.2% Tanzania 60 1.1% Zambia 1080 20.5% Zimbabwe 1015 19.3% TOTAL 5265 SOUTHERN AFRICAN POWER POOL 3.4 Transmission Projects Transmission projects are classified as follows: i. Outstanding transmission interconnectors whose aim is to interconnect non-operating members of the SAPP to the SAPP grid: Malawi-Mozambique interconnector, ii. Zambia-Tanzania-Kenya Interconnector, and Westcor project. Transmission interconnectors aimed at relieving congestion on the SAPP grid, and iii. New transmission interconnectors aimed to evacuate power from generating stations to the load centres. 13 SOUTHERN AFRICAN POWER POOL 3.5 Summary of Transmission Projects - 1 TIE LINES TO INTERCONNECT NON-OPERATING MEMBERS Interconnector Description Mozambique - Malawi (2 X 220 kV) Zambia -Tanzania - Kenya 330 kV: Pensulo-Mbeya-Singida (Single circuit) WESTCOR - Inga -Kwanza- AuasGaborone-Pegasus) MW Year Feasibility Study Status Complete Cost USD[M] Country Mozambique, Malawi 250 2008 P Yes 85 200 2007 P Yes 330.3 Zambia, Tanzania, Kenya 3000 2012 P No 3500 Angola, DRC, Namibia, Botswana, RSA TRANSMISSION CONGESTION RELIEF PROJECTS Interconnector Description MW Year Triangle - Orange Grove 330 kV line & Substation650 Project 2007 Second Alaska - Sherwood 330 kV line 650 2008 Hwange - Livingstone -Kafue 330 /220 kV Project 650 2008 14 Status NTC NTC Feasibility Study Yes No NTC No Cost USD[M] Country 49.2 Zimbabwe 15.5 Zimbabwe 42.5 Zimbabwe /Zambia SOUTHERN AFRICAN POWER POOL 3.5 Summary of Transmission Projects - 2 INTERCONNECTORS TO INCREASE TRADE / TRANSFER CAPABILITY Feasibility Cost Interconnector Description MW Year Status Study USD[M] Zambia -Namibia HVDC (220 kV DC) Livingstone - Katima Mulilo 220kV 2nd line Tanzania - Zambia 330 kV Phase 2: 200 300 2008 2009 NT NT Yes Yes 220 45 Zambia, Namibia Zambia, Namibia Pensulo-Mbeya-Singida (second circuit) 200 2012 NT No 289.8 Zambia, Tanzania Kolwezi - Solwezi 330 kV DRC Reinforcement (2x 500 kV DC Inga- 800 2009 NT No 25 DRC, Zambia Kolwezi) Karavia - Luano 330 kV Second Interconnector ZESA -Eskom 420 kV 840 600 2010 2009 NT NT Yes No 170 93 DRC DRC, Zambia 650 2008 NT Yes 46.1 Zimbabwe, RSA 15 Country SOUTHERN AFRICAN POWER POOL 4. LONG-TERM GENERATION PROJECTS LONG TERM GENERATION PROJECTS (2011 ) Type Expected Commissioni ng Year Feasibility Study Complete 50 Hydro 2011 No 38 N NGN Capacity [MW] Country Project Name Tanzania Tegeta Tanzania Kinyerezi 200 Hydro 2011 No 190 N NG Zimbabwe Mini Hydro Generation 15.5 Hydro 2011 Pre-feasibility 19.5 N NG Zimbabwe Lupane 300 Gas 2011 In Progress 250 N NG Zimbabwe Condo 100 Hydro 2011 Pre feasibility 100 N NGN Zimbabwe Western Power Station 1200 Coal 2011 Pre-feasibility 1300 N NG 3500 N NG N R DRC Inga - 3 (WESTCOR) 3500 Hydro 2011 Concept DRC Inga-2 Refurbish Busanga 324 240 Hydro 2011 2011 Yes DRC Hydro Yes 300 N NG South Africa ESKOM Coal Option 1 630 Coal 2011 Yes 753 A NG South Africa 2xCCGT 1600 CCGT 2011 Yes 811 N NG 260 Hydro 2011 No 772 N NG Zimbabwe Victoria Falls 390 Hydro 2011 589.3 N NG Zimbabwe Mupata Gorge 600 Hydro 2011 Pre-feasibility Pre-Feasibility 906.6 N NG Zimbabwe Devils Gorge 600 Hydro 2011 906.6 N NG Angola 16 Estimated Project Cost USD Funding [M] Availability Category Cambambe II Pre-feasibility SOUTHERN AFRICAN POWER POOL Long - term Generation Projects - 2 LONG TERM GENERATION PROJECTS (2012 - 2013) Capacity [MW] Type Expected Commissioni ng Year Mphanda Nkuwa (Phase I) 1300 Hydro 2012 Yes 1363 N NG Grand Inga Phase-1 6000 Hydro 2012 Yes 4025 N NG 1600 Hydro 2012 Yes 2500 N NG ESKOM North Coal Option 1 630 Coal 2012 Yes 753 A NG Zimbabwe Gokwe North 1400 Coal 2012 Yes 1357 N NG Lesotho Swaziland Muela Phase-2 Lubombo 110 1000 Hydro Coal 2012 2012 Yes In Progress N N NG NG Fufu 100 Hydro 2012 No 141 N NG Mozambique Temane/Pande 450 CCGT 2012 No 229 N NG Mozambique Mozambique Temane/Pande Lurio 714 183 CCGT Hydro 2012 2012 No No 344 339 N N NG NG Mozambique Mavuzi III 60 Hydro 2012 No 119 N NG South Africa ESKOM_Pumped Storage Nzilo 2 1000 120 Hydro 2013 2013 Yes 976 N NG Concept N NG Zongo 2 150 Concept N NG ESKOM Coal Option 2 630 N NG Country Mozambique DRC Project Name Zimbabwe /Zambia Batoka South Africa Malawi DRC DRC South Africa 17 Hydro Hydro Coal 2013 2013 Feasibility Study Complete Estimated Project Cost USD Funding [M] Availability Category In Progress 760 SOUTHERN AFRICAN POWER POOL Long - term Generation Projects - 3 LONG TERM GENERATION PROJECTS (2014 - 2015) Country Project Name Type Feasibility Study Complete Mozambique Moatize 1800 Coal 2014 Yes 2000 N NG South Africa ESKOM North Coal Option 2 630 Coal 2014 In Progress 760 N NG 360 Hydro 2015 Yes 640 N NG Oxbow Kudu Phase 2 80 800 Hydro Gas 2015 2015 Yes Yes 155 350 N N NG NG ESKOM_Pumped Storage 1000 Hydro 2015 Yes 976 N NG Ruhudji 358 Hydro 2015 Yes 611 N NG Angola Medio Kwanza 6700 Hydro 2015 No N NG Lesotho Monontsa Pumped Storage 1000 Hydro 2015 No 2666 N NG Zambia Luapula 950 Hydro 2015 No 1500 N NG Zambia Kalungwishi 163 Hydro 2015 No 210 N NG South Africa ESKOM Coal Option 2 630 Coal 2015 In Progress 760 N NG Mozambique Lupata 654 Hydro 2015 No 1215 N NG Mozambique Boroma 160 Hydro 2015 No 150 N NG Mmamabula 3600 Coal 2015 In Progress 5000 N NG Angola/Namibia Baynes Lesotho Namibia South Africa Tanzania Botswana 18 Capacity [MW] Expected Commissioni ng Year Estimated Project Cost USD Funding [M] Availability Category SOUTHERN AFRICAN POWER POOL 5. STRATEGIC CONSIDERATIONS The following factors were considered in the strategic analysis: i. 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. ii. Geographical spread of the projects - A check to reduce the risk of having most projects in one country. iii. Reserve margin requirements - Ensure that no over capacity or under investment occurs 19 SOUTHERN AFRICAN POWER POOL Committed Generation Projects only commissioned 65000 60000 MW 55000 50000 45000 40000 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 35000 Year Capacity Planned 20 Peak Demand with DSM + Reserve SOUTHERN AFRICAN POWER POOL Committed & Rehabilitation only 72000 68000 64000 MW 60000 56000 52000 48000 44000 40000 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 36000 Year Capacity Planned 21 Peak Demand with DSM + Reserve SOUTHERN AFRICAN POWER POOL Committed - Rehabilitation - Short Term 72000 68000 64000 MW 60000 56000 52000 48000 44000 40000 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 36000 Year Capacity Planned 22 Peak Demand with DSM + Reserve SOUTHERN AFRICAN POWER POOL 6. CONCLUSION i. 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 ii. As a result the region needs investments in both generation and transmission infrastructure. iii. 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. iv. Funding is therefore needed for project implementations. 23 SOUTHERN AFRICAN POWER POOL THANK YOU 24 SOUTHERN AFRICAN POWER POOL