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SOUTHERN AFRICAN POWER POOL Regional and Sub-Regional Issues

SOUTHERN AFRICAN POWER POOL Regional and Sub-Regional Issues PPP Power Projects in Southern Africa Addis Ababa, ETHIOPIA 30 June – 1 July 2011. Introduction to the SAPP Installed Capacity & Generation Mix Challenges to Cross-Border PPP Projects in the Power Sector

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SOUTHERN AFRICAN POWER POOL Regional and Sub-Regional Issues

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  1. SOUTHERN AFRICAN POWER POOL Regional and Sub-Regional Issues PPP Power Projects in Southern Africa Addis Ababa, ETHIOPIA 30 June – 1 July 2011

  2. Introduction to the SAPP Installed Capacity & Generation Mix Challenges to Cross-Border PPP Projects in the Power Sector Measures and Mechanisms to Address the Challenges Role of the Power Pool • KEY ISSUES

  3. INTRODUCTION TO THE SAPP DR Congo Tanzania Angola Malawi Zambia Zimbabwe Namibia Mozambique Botswana Swaziland South Africa Lesotho 1.1 Geographic • 12 Countries • 230 Million people • Average Electricity growth rate 3% p.a. • For South Africa demand growth was 4.9% in 2007 and for whole region 4.6%.

  4. 1.2 Membership CEC and LHPC from Zambia are the new Members of SAPP

  5. INSTALLED CAPACITY & GENERATION MIX 2.1 Installed Capacity

  6. 74.3% Coal 20.1% Hydro 4.0% Nuclear 1.6% Gas/Diesel 2.2 Generation Mix & Contributions – Year 2011

  7. CHALLENGES TO CROSS-BORDER PPP PROJECTS • Lack of enabling environment for PPP • Government policies yet to be harmonized • Legal & regulatory frameworks inconsistent • Incomplete power sector reforms • National Utilities still enjoy monopoly • PPP concepts not yet understood • Policies on PPPs not yet developed in most countries

  8. CHALLENGES TO CROSS-BORDER PPP PROJECTS • Low Electricity Tariffs – Inadequate and unsustainable levels with attendant challenges and NOT able to provide right signals for: • New Investments from the Private Sector • Energy conservation, efficiency & substitution practices by customers

  9. Example of Cross-Border Transmission Projects DRC 2013: ZIZABONA -220/330 kV Tanzania 2013: Mozambique Malawi Malawi Angola 2014: Zambia - Tanzania - 400 kV Zambia 2015:DRC - Angola – 400 kV Zimbabwe Namibia Mozambique 2016: MOZAMBIQUE BACKBONE -RSA Botswana 2017: Namibia – Angola Swaziland Lesotho South Africa

  10. MEASURES & MECHANISMS TO ADDRESS THE CHALLENGES • Policy choices to address challenges should be developed and need to recognize: • Need for financial viability – implement the policy of cost reflective/sustainable tariffs • Develop appropriate policy frameworks for PPPs • Complete power sector reforms in line with policy aspirations: Improve governance & operations • Tariffs: Regulators need to regulate towards cost reflectivity to allow existing utilities to recover operational costs and contribute to capital costs

  11. ROLE OF THE POWER POOL • Assist the region to harmonize PPPs policies on cross-border projects • Assist the region with the development of technical standards and the pool grid code • Develop transmission wheeling charges and wheeling model for all cross-border projects • Assist with the standardization of wheeling and power purchase agreements between parties • Organize workshops on PPPs and concepts

  12. THANK YOU

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