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Region:

Urgency mounts as energy crunch nears

[© MRB Feb 07] The states of Southern Africa are taking urgent measures to counter the fast-looming energy crunch in the region. Already brown-outs are occurring as industrial and social consumption expands and SA's power utility Eskom, which supplies power to Namibia, Zimbabwe and Zambia has put them on a 24-hour notice that it may cut supplies.

• Eskom supplies 95 percent of SA's power and 60 percent of the power generated on the continent.
• Eskom could cut supplies to Namibia, Zambia and Zimbabwe, the only three Southern African countries to be affected, at 24 hours notice.
• Eskom needs to boost existing capacity by 2,000MW a year for 20 years to meet a six percent annual growth target.
• Eskom is projected to run out of excess peak capacity this year and excess base load in 2010.
• Government fears that lack of reliable power supply could stifle investment.
• Namibia, Zambia and Zimbabwe could get electricity from a short-term energy market (STEM) should Eskom take the three countries off the grid.

Zambia:

China will finance Kariba North power station

[© MRB Feb 07] Zambia has secured a US$300 million loan from China to boost hydropower generation at Kariba North Bank, the country's biggest hydro-electric station.

• Already Zesco has started load shedding.
• Zambia has projected increasing power generation by 180 per cent from the current 1, 608 to 4,500MW by 2010.
• A $1.2 billion hydropower station at Kulungwishi is planned.
• Zesco is constructing a power line to Namibia.
• Last year, Zesco signed a contract to supply the cash-strapped Zimbabwe Electricity Supply Authority (ZESA).
• Zambia is already working on improving Kafue Gorge Lower hydropower station.
• The Chinese government has promised Zambia that additional funds will be released for the development of other hydropower stations.

RELATED REPORTS ...

Region:

Hydro-power projects identified

[© MRB Feb 07] Power generation projects in the region using coal, gas and hydro-electricity, amount to a potential of a massive 17,375MW.

Top of the list is the development of the Inga 3 dam (3,500MW) on the Congo River. The European Investment Bank announced this month it would come in as a part financier.

The list of regional hydropower projects includes the Mpanda Nkuwa dam in Mozambique (1,300MW), the Cahora Bassa North Bank dam, also in Mozambique (850MW), and the Kafue Gorge Lower dam in Zambia (600MW), as well as the 750MW gas-to-power project in Temane (Mozambique).

Namibia:

Pohamba seeks to fast-track energy law

[© MRB Feb 07] Namibia's President Hifikepunye Pohamba this month urged his country's parliament to fast track an Electricity Bill into law to avert an "impending crisis" in the country.

Pohamba made no mention of the nuclear option announced last October.

TODAY'S NEWS

South Africa:

Integrated nuclear energy sector planned

[© MRB Feb 07] South Africa this month confirmed it will expand nuclear energy with a second power plant and will go into the nuclear enrichment business, both to supply its own plant and to export.

A number of foreign companies have already put down markers for building the new power station and for working on the enrichment plant.

• Mini power stations ...
• South Africa announced it would build a second nuclear power station in the Cape.
• An integrated nuclear industry is planned, involving nuclear enrichment from SA's own uranium reserves.
• New pebble-bed power stations mini-plants would themselves be a valuable export to Africa and beyond.
• The government is likely to face rising domestic opposition.
• French and Russian cmpanies will be among those bidding to build the second nuclear plant.
• Beneficiation of uranium ...
• South Africa wants also to be able to produce domestically the nuclear components involved.
• The SA mining industry was increasing uranium exploration.

Zimbabwe:

Forex shortage hits power generation

[© MRB Feb 07] In Zimbabwe, the third country affected by a possible Eskom power cut-off, there have already been blackouts because of its failure to pay for electricity imports even at the reduced rate Eskom is asking in the region.

• There is no clear way out for the country until it is able to end its isolation and borrow.
• Whether or not Eskom finally shuts down its power to Zimbabwe will, however, be a political decision rather than a commercial one.

Botswana:

Japan plans to invest in coal project

[© MRB Feb 07] While South Africa's focus is on moving away from coal-based energy production, Botswana is moving in the opposite direction. It has its own energy plans involving the massive new Mmamabula coal fired energy project.

• Japan may invest in elements of this project related to the export of coal.
• The US$5.5 billion project is expected to sell 95 percent of the electricity to Eskom.

Congo:

EIB to join the Inga scheme

[© MRB Feb 07] The EIB plans to participate, along with the World Bank and the African Development Bank, in financing the fourth phase of the rehabilitation of the Inga dam in the DR Congo.

• However, it may take time to materialize.
• Primarily the Congolese authorities must first introduce reforms in the electricity sector.

Zambia:

Tax hike will not affect existing copper contracts

[© MRB Feb 07] The Zambian government has proposed to raise a tax on mining companies, aimed at helping the copper-rich country cash in on high global prices.

The proposed changes will not affect existing contracts.

• Popular dissent against President Levy Mwanawasa on the Copperbelt will mount.
• More revenue collection ...
• The mineral royalty tax will be increased from the current 0.6 percent to the world average of 3 percent. The global norm is a 3 percent royalty tax.
• The International Monetary Fund last year pressed for this change.
• The plan is part of the US$3 billion 2007 budget. There was 5.8 percent growth in 2006, up from 5.2 percent in 2005, and that inflation stood at 8.2 percent.
• Zambian copper production rose by 7.9 percent in 2006, from 459,324 metric tons to 492,016 metric tons.

Congo:

Meeting will discuss governance in mining sector

[© MRB Feb 07] With wartime mining contracts threatening to become an issue for the new DR Congo government, the main Belgian mining group, Forrest, is sponsoring a conference on the sector.

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Namibia:

New diamond-cutting plants on hold

[© MRB Feb 07] Namibia, the world's sixth largest diamond producer, has announced a freeze on new diamond cutting and polishing plants to ensure smooth supplies to existing ones.

• Demand is outstripping supply following the signing of a sales agreement between the Namibian government and South African diamond giant De Beers to sell locally mined stones.
• De Beers will set up a local trading firm called Namibia Diamond Trading Company.

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Mozambique:

Oil interest left unsaid by Chinese side

[© MRB Feb 07] Hu Jintao's official visit this month was the first by a Chinese president.

• Hu only announced a debt waiver, cash grants, and increased market access.
• But China is in a race to find oil and gas reserves offshore.
• China National Offshore Oil Corp (CNOOC), announced that it would invest 10 billion Yuan over the next three years to boost offshore exploration.

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MARKERS ...

Tanzania:

Splits over Comesa application

[© MRB Feb 07]  The business community in Tanzania is divided on whether it should rejoin the Common Market for Eastern and Southern Africa (Comesa), which it quit in 2001.

• Tanzania pulled out of Comesa in 2000 to avoid duplication with SADC, the Southern Africa Development Community, and the East African Community (EAC).
• Meanwhile a deal has been agreed to export duty-free textiles and garment products to the Southern African Customs Union (SACU) member countries. SACU member countries will trade fruit and beer.
• The move comes a month after the expiry of a six-month interim agreement for Tanzania to export its textile products to SACU, part of a bid to form a free trade area in SADC over an eight-year period.

Region:

Kenya breaks away from SA's Nepad cable deal

[© MRB Feb 07] In a further blow to one of the New Partnership for Africa's Development's biggest infrastructure plans, the Kenyan government has signed US$2.7 million agreement with the US firm Tyco International to study the construction of an undersea cable to the United Arab Emirates.

• Kenya has refused to sign up to a 23-nation Nepad plan to build the Eastern Africa Submarine System (EASSy), after disagreeing with SA about cost and management.