Aggreko has recently signed Tri-Party Power Purchase Agreements (TPPA) with Electricidade de Moçambique (EDM), the Mozambique power utility and NamPower, the Namibian power utility, to provide 122 MW of gas-fuelled power from the Aggreko interim power plant located at Gigawatt Park at Ressano Garcia, Mozambique.
The agreement follows the authorization by EDM for the direct supply of power by Aggreko to NamPower and will see the installed capacity of 122 MW split between the two utilities with EDM utilizing up to 32 MW and NamPower up to 90 MW, based on the specific needs of both utilities. Aggreko built the facility at Ressano Garcia in 2012 as part of an ambitious project in which it became the first cross-border, interim Independent Power Provider to the Southern African Power Pool (SAPP).
Under the first phase of the project, which started power production in July 2012, Aggreko and its joint-venture partner Shanduka supplies power to EDM for national energy requirements in Mozambique, and also generates power for the South African utility ESKOM. The success of this initial project, which is currently providing 110 MW of power to the two utilities, has enabled Aggreko to offer additional power to other members of the Southern African Power Pool.
The transmission infrastructure will help Aggreko to supply power generated in Mozambique to Namibia, more than 1,500 kilometers away, as well as locally to EDM. While EDM will transmit the power over its network to the South African border where NamPower will take delivery, Eskom on behalf of NamPower will handle the wheeling of the power across the South African grid network to Namibia.
The new 122 MW power plant is scheduled to go into production in the second quarter of 2013 and will supply power for a minimum of two years. Natural gas to the project will be supplied by the Matola Gas Company SA through their gas infrastructure at Ressano Garcia and Aggreko will generate power utilizing a sub-concession agreement with Gigawatt Mozambique SA. The total value of the project is likely to be in excess of $200 million, including fuel costs.