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Independent Power Producers can help Africa’s power crisis

Panel members at the Africa Energy Indaba’s conference on Power Purchase Agreements (PPA) and Independent Power Producers (IPP) said IPPS can help solve Africa’s power crisis


The keynote speakers and panel members at the fourth IPP and PPA Conference said on 23 February at the annual Africa Energy Indaba conference in Sandton IPPs can help solve Africa’s power crisis. The IPP and PPA conference was sponsored by Herbert Smith Freehills, an international law firm with extensive experience in advising IPPs in Africa.


Dr Elham Ibrahim from the African Union Commission said there was a need to involve IPPs in addressing Africa’s power needs as governments could not do it on their own.  “I believe the time for more serious action has come for scaling up the implementation of renewable energy in Africa. The continent has abundant renewable energy resources in the form of hydropower, solar, wind, geothermal and bio-energy that are appropriate for responding to the challenge of energy access, especially for our large rural population”, she said.


IPPs are now present in 18 Sub-Saharan African (SSA) countries. Currently there are 59 projects of greater than 5 Megawatts (MW) capacity in SSA in countries other than South Africa with a committed capital investment of $11.1bn and 6 800 MW of installed generation capacity. Including South Africa adds 67 more IPPs, bringing the total to 126, with an overall installed capacity of 11,000 MW and investments of $25.6bn.


In addition to IPPs, significant increases in generation capacity have stemmed from Chinese-funded projects. Chinese-funded generation projects can be found in 19 countries in Sub-Saharan Africa. Eight of these countries have IPPs as well as Chinese-funded projects.


In South Africa the Renewable Energy Power Producer Procurement Programme (REIPPPP) was launched in 2011 by the Department of Energy and was a resounding success, spurring investment into SA’s energy sector with R194bn in commitments. At the end of 2015, 6 376 Megawatts (MW) of power was successfully procured from 102 IPPs in four bid rounds of the REIPPPP.

 

Of the 6 376 MW procured, just over 2 000 MW of electrical generation capacity has been connected to the national grid with more due to be connected in October this year. This is equivalent to just under half of the capacity of an additional coal-powered station, delivered in a third of the time.


Paddy Padmanathan from ACWA Power said in his keynote address that the key to successful IPPs was the allocation of risk to those best able to mitigate the risk. Although most risk analysis focused on the ability to pay of the offtaker, an equally important part was the willingness to pay as political changes could impact this factor half way through the term of the offtake agreement.


In that respect Jasandra Nyker from Biotherm Energy gave the audience comfort as she said that despite numerous changes in the head of government in Zambia, the renewable projects that she had been involved with had gone ahead without a hitch.


Investors in Tanzania’s power sector on the other hand are worried about the rising number of contract disputes between foreign companies and the government, including the row between IPP Symbion Power and Tanesco over the failure to pay for power from the 120 MW Ubungo gas-fired plant. Tanesco stopped taking power from Ubungo in May 2016, but under the terms of the PPA it continues to incur the charges each month. Symbion is owed around $35 million by Tanesco.


A recent successful IPP project in neighbouring Mozambique shows what can be done to address Africa’s power needs. In February 2016 Mozambique President Filipe Nyusi inaugurated the 120 MW Gigawatt Park gas-fired power station in Ressano Garcia. The project, which took 18 months to complete, was developed by South African investment group and majority shareholder in the project Gigajoule International.


The stalling by state-owned electricity utility Eskom on signing PPAs with 37 IPPs since July 2016 has undermined the credibility of the South African government. On 9 February 2017 President Jacob Zuma in his State of the Nation Address instructed Eskom to sign the outstanding PPAs.


“Eskom will sign the outstanding power purchase agreements for renewable energy in line with the procured rounds,” Zuma said. Panel members said however that the damage has been done and IPPs would in future be more wary of participating in South Africa’s power procurement.


Politicians and bureaucrats do not seem to understand the concept of “time is money” so the millions of dollars in interest charges while no revenue was being generated since July 2016 will make private sector investors wary of preparing bids where there was little certainty.


“The changing of the rules in midstream has done severe damage to South Africa’s hard won reputation as a reliable partner. What you need from governments as an IPP partner is certainty, predictability and trust that commitments will be met,” Matthew Ash from Ash Konzult said. Fazeel Moosa from Investec said that smaller projects have greater flexibility, while a modular approach to project development could also help establish trust between all parties concerned. “What we are seeing is that phased projects have a greater chance of success so Noor 1 for instance leads to Noor 2, Noor 3 and so on,” Moosa said.


Paddy Padmanathan from ACWA Power agreed and said that community involvement was also a key success factor. “When we develop a project we aim to maximize the retention of value in the local and national economy and in the local communities through maximizing the share of expenditure for construction and operation and maintenance at a local and national level. We do this by maximize local skills development and meaningful job creation, so with partners such as Nestle and Revlon we undertake in parallel, community development activity to uplift and contribute to the local economy and community,” he said.

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Food prices continue to rise, but at a slower rate

28th November 2022

Prices for cereals or staple foods in Botswana and other Southern African countries continue to rise at a slower pace, following trends in the global markets, according to the latest November 2022 Food Price Monitoring and Analysis by Food Agricultural Organization (FAO) of the United Nations.

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Still doing business the old way?

18th November 2022

It’s time to get business done better with MTN Business Botswana’s ICT Solutions.

Running a digital businessMTN Business Solutions Botswana, popularly known as MTN Business is an Internet Service Provider. We are a subsidiary of MTN Group Limited, a multinational telecommunications Group headquartered in South Africa, which operates in 19 markets across Africa and the Middle East.

More and more, clients are looking for ways to keep their staff productive in a dynamically changing business environment. Whether your people are working from home, the office or abroad, there is a growing recognition that digitising your operations can offer unprecedented commercial value in flexibility, productivity and growth. This new, digital reality means that it is more important than ever to stay agile – if there is anything that can slow a business down, it is being burdened by othatld technology.

Having made substantial investments in fibre technology, high-speed terrestrial and undersea networks and new frequency spectrum across the markets wherein it operates, MTN is perfectly positioned to respond to this shift in the market.

A few years ago, MTN also made the decision to build an IP capable radio network for its mobile services, giving its core network the ability to seamlessly integrate with enterprise IP networks. The mobile towers deliver services to enterprise clients absolutely anywhere it has a network, shortening the last mile and removing complexity and cost.

Now there is increasing demand from clients to connect their remote sites in all areas, including rural and semi- rural. MTN has assisted clients with overcoming this connectivity hurdle, enabling their staff to get the job done wherever they are.
MTN’s evolution

For MTN, the focus has shifted from just being a core telecommunications services provider, towards also becoming a technology solutions provider. The service offering now also includes Unified Communications, Data Hosting and Cloud Solutions, Security-As-A-Service and Managed Network Services. The scope has changed to being client and industry specific, so the requirements and service portfolio vary from one client to the next. The expectation is that a company like MTN must respond to these challenges, helping clients to get business done better as they shift from old to new technologies.

As many businesses continue to grapple with a digitally dynamic world, they face new challenges that have to be solved. This environment will benefit those that are more digitally enabled and agile. It is a brave new world that will favour online over on-site, wireless over wired and fluid over formulaic. Businesses will seek out partners and suppliers that are every bit as flexible and forward-looking as they are.
Ultimately, clients need partners like MTN Business that will invest in infrastructure, deliver the services they require, have market credibility, are financially sound and have a long-term commitment to their market presence.

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BIE to vitalize the Dignity of Engineers

9th November 2022

Botswana Institution Of Engineers (BIE), has last week hosted a gala dinner in  which they appreciated engineers who worked tirelessly and with dedication for 10 years from 1983 to steer the BIE to its current status.

The event that was held at the Phakalane Golf Estate had brought together young, experienced and veteran engineers and was held under the theme “Vitalize the dignity and eminence of all professional engineers”.

Explaining the theme, the institution’s treasurer, Thanabalasingam Raveendran said that engineers were looked upon reverentially with respect as the educated but with time it seems to have deteriorated. He indicated that there is a need to change the narrative by all means.

“The BIE exists for the welfare and the betterment of us Botswana engineers, we need to recognize specialised units within our Institution. We Engineers strongly believe in Engineers make it happen” Raveendran said.

He indicated that under the theme they appeal to all engineers to energize, to attain quality of being worthy of honour and respect and to achieve recognized superiority amongst the Society.

Raveendran stated that engineers need to ensure their end product is of good quality satisfying the end users expectations and engineers must be honest in their work.

“Approximately 8000 engineers registered with Engineering Regulatory Board (ERB) are not members of the BIE, engineers need to make every effort to recruit them to BIE” he said.

He alluded that BIE being a society, it currently needs to upgrade itself at par with professional institutions elsewhere like the UK and USA.

He further stated that BIE has to have engineering units of specialised disciplines like Civil/Mechanical/electrical etc

“As President Masisi indicated in his inaugural speech, the young people, who make 60 percent of the population of this country, are the future leaders and therefore investing in them is building the bridge to the future” said Raveendran

Kandima indicated that BIE has a memorandum of Understanding with Engineers Registration Board (ERB), where BIE is a recognised provider of CPD training, mentorship programmes and more importantly IPD undertaking to upgrade the skills and know-how of our engineers.

“For us to achieve our mandate and make worthwhile changes to engineering in Botswana, we have to be totally focused and act with intent” said Kandima.

Furthermore, Stephen Williams, past president of the BIE from 1986-1988 told the engineers that  the BIE provides a fertile environment where they can meet, share ideas and grow professionally.

“The BIE is also a nesting place for graduate engineers to learn from their peers and seniors, it also cater for engineering technicians and technologists and so nobody in the technology field is left out” he said.

He further indicated that Botswana Government provides a conductive environment for growth of engineering professionals.

“It must be stated that the Botswana Government recognises the existence of BIE and it can further be stated that the government enables ERB to carry out its mandate as a regulator of engineering professionals” said Williams

He plead with engineering companies to recognize and support BIE as it is the only source of engineering personnel’s for various Industries .

Furthermore, when giving his farewell speech, Michael Pinard , a past president of the institution  said how they are viewed as engineers by the general public might be due to some lack of appreciation as to exactly what role they play in the development of the country.

“The BIE slogan is aptly coined-Engineers make it happen, in other words, what man dreams engineers create” Said Pinard.

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