Aggreko, along with its joint-venture partner Shanduka Group, has signed a power purchase agreement with Eskom, the South African power utility, and agreed to PPA terms with Electricidade de Moçambique, the Mozambique power utility, to provide a 107-MW power plant that will supply baseload and peak power to both companies. Both PPAs are subject to the parties fulfilling a number of conditions before becoming effective. The latest agreements follow the opening early last week of Aggreko's new service center in Nairobi, Africa — the sixth service center in Aggreko's Southern and East African network.
The new power plant will be situated on the Mozambique/South African border at Ressano Garcia, 90 kilometers northwest of Maputo. It will be powered by natural gas from the Temane gas fields in Mozambique and its output will be injected into the national grid of Mozambique on site at Ressano Garcia. The output of the plant will be split between the two companies, with EDM utilizing 15 MW and Eskom 92 MW.
This is thought to be the first project by a private company to supply power cross-border to two utilities in Southern Africa, and underlines the potential benefits that can accrue to countries sharing resources, Aggreko said. Both countries will get much needed additional power, and the project also underscores the importance of Mozambique as an energy hub for the entire Southern African region.
The plant is expected to start operations early in the third quarter of 2012, and supply power until July 2014. Aggreko is responsible for building gas interconnections, a major substation and 1.5 kilometres of 275 kV transmission line working alongside the Matola Gas Co. SA and Gigawatt Mozambique SA. The total value of the project is expected to be U.S. $250 million over two years, including fuel costs.
"This is a very important project for Aggreko, and for Southern Africa, as it underlines the benefits of countries working together for the common good," said Rupert Soames, chief executive of Aggreko. "We hope it will be a pathfinder for other countries seeking to make the most of their resources to optimize the supply of power across the region."
"The partnership with Aggreko creates an opportunity for Shanduka to contribute to the Southern Africa Power Pool," said Phuti Mahanyele, CEO, Shanduka Group. "This unique project will contribute to the provision of a reliable power supply and support South Africa in meeting its energy needs."
Speaking for EDM, CEO, Augusto Sousa Fernando added, "EDM, in its role as the national power utility and system operator in Mozambique, welcomes the Aggreko interim power plant in Ressano Garcia at Maputo Province and will provide the support required to make it a reality and to ensure that the energy to be generated by the project contributes to the construction of our future in Mozambique and supports the socio-economic development in the SADC region as well."
Based in Scotland, with North American headquarters in Houston, Aggreko is No. 9 on the RER 100.