UK-based interim power solutions company Aggreko has joined forces with South Africa’s Shanduka Group to provide power from a gas field in Mozambique.
The two companies will provide a 107 MW power plant which will use gas from Mozambique’s Temane gas field to provide an interim power supply to South African power utility Eskom and its Mozambican counterpart, Electricidade de Moçambique (EDM).
The project follows discussions between Aggreko, Shanduka Group, Eskom and EDM early in 2011 and has now been approved by the South African energy regulator NERSA and the country’s Departments of Energy and Public Enterprise.
The power plant will be built on the site of Gigawatt Mozambique as part of its concession agreement at Ressano Garcia, on the Mozambique/South African border. Aggreko will be responsible for building gas interconnections, a major substation and 1.5 kilometres of 275 kV transmission line, as per agreements with the Matola Gas Company and Gigawatt Mozambique.
This is thought to be the first project by a private company to supply an interim cross-border power solution to two utilities in southern Africa, with both countries set to benefit from much-needed additional power.
The total value of the project is expected to be around $250 million over two years, including fuel costs.
Rupert Soames, chief executive of Aggreko, commented: “This is an important contract for Aggreko, and for southern Africa, underscoring the benefits of working together for the common good. Southern Africa is experiencing strong and sustained economic growth and the demand for energy is a major issue. Meeting future needs is going to require an energy mix, and natural gas—which has the lowest environmental impact out of the thermal options—will definitely be part of the solution. We also hope this project will be an example for other countries seeking to optimise their resources and manage the supply of regional power.”
Phuti Mahanyele, CEO of Shanduka Group, added: “The partnership with Aggreko creates an opportunity for Shanduka to contribute to the Southern Africa Power Pool. This project will support our vision of creating value while making a difference. Shanduka will oversee the employment and training of about 100 locals and we will also lead the procurement process to ensure South African companies benefit. We are also pleased to announce that we will be supporting a school in the area as part of our Adopt-a-School Foundation.”
The power plant is expected to come on-stream early in the third quarter of this year. Generation capacity will be split between the two companies, with EDM utilising 15 MW and Eskom 92 MW.
Aggreko is the world leader in the supply of temporary power and temperature control solutions. The company employs over 4,500 people operating from 165 locations, and in 2011 had revenues of approximately £1.4 billion.
Shanduka Group is an African black-owned and managed investment holding company, with a portfolio comprising resources, energy, financial services, property, industry, and food and beverage. The group has over 60 employees, whilst its investee companies employ more than 180,000 people. Total black ownership amounts to 54.9 per cent, of which 18.6 per cent is held by broad-based development trusts.
