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SAPP Priority Projects for Investor Consideration & Funding

SAPP Priority Projects for Investor Consideration & Funding . CONTENTS. BACKGROUND SELECTION CRITERIA SAPP PRIORITY PROJECTS LONG-TERM PROJECTS STRATEGIC CONSIDERATIONS CONCLUSION. BACKGROUND.

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SAPP Priority Projects for Investor Consideration & Funding

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  1. SAPP Priority Projects for Investor Consideration & Funding

  2. CONTENTS BACKGROUND SELECTION CRITERIA SAPP PRIORITY PROJECTS LONG-TERM PROJECTS STRATEGIC CONSIDERATIONS CONCLUSION

  3. 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.

  4. SAPP Projects currently in progress R = Rehabilitation, NG= New generation NOTE: Above projects not subjected to a selection criteria

  5. 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

  6. 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.

  7. 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

  8. 3.1 Rehabilitation Projects

  9. The above transmission projects are essential to support rehabilitation projects: • Reduce congestion • Evacuation of power to load centre

  10. 3.2 Short-Term Generation Projects NG= New generation

  11. 3.3 Country Capacity Contribution

  12. 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.

  13. 3.5 Summary of Transmission Projects - 1

  14. 3.5 Summary of Transmission Projects - 2

  15. LONG-TERM GENERATION PROJECTS

  16. Long - term Generation Projects - 2

  17. Long - term Generation Projects - 3

  18. 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

  19. 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 Peak Demand with DSM + Reserve Capacity Planned

  20. Committed & Rehabilitation only 72000 68000 64000 60000 56000 MW 52000 48000 44000 40000 36000 2005 2006 2007 2008 2010 2012 2013 2015 2017 2018 2020 2009 2011 2014 2016 2019 Year Capacity Planned Peak Demand with DSM + Reserve

  21. 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

  22. 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.

  23. THANK YOU

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