Aggreko will partener with Shanduka Group to provide 107MW power plant
Temporary power supplier Aggreko has secured a $250 million (£161.6 million) contract to provide a 107 MW power plant in a joint venture with a South African investment firm.
Glasgow-based Aggreko and joint-venture partner Shanduka Group have signed a Power Purchase Agreement (PPA) with South African power provider Eskom to supply 107 MW of utility power in South Africa and Mozambique.
The plant will be situated on the border between Mozambique and South Africa at Ressano Garcia, 90 kilometres north-west of Maputo.
It will be powered by natural gas from the Temane gas fields in Mozambique and its output will be injected into the national grid of Mozambique on site at Ressano Garcia.
The output of the plant will be split between two companies, Electricidade de Moçambique (EDM) and South African utility Eskom, with EDM utilising 15 MW and Eskom 92 MW.
This is thought to be the first project by a private company to supply power cross-border to two utilities in Southern Africa.
The plant is due to come online in the third quarter of 2012 and will supply power until July 2014.
Under the terms of the deal, Aggreko, working alongside the Matola Gas Company SA and Gigawatt Mozambique SA, will build gas interconnections, a major substation and 1.5 kilometres of 275 kV transmission line.
The total value of the project, which is subject to unspecified conditions being met in advance, is estimated to be worth in the region of $250 million to Aggreko over two years, including fuel costs.
Rupert Soames, Chief Executive of Aggreko said, "This is a very important project for Aggreko, and for Southern Africa, as it underlines the benefits of countries working together for the common good.
“We hope it will be a pathfinder for other countries seeking to make the most of their resources to optimise the supply of power across the region.”
Phuti Mahanyele, chief executive of Shanduka Group, added: “The partnership with Aggreko creates an opportunity for Shanduka to contribute to the Southern Africa Power Pool.
“This unique project will contribute to the provision of a reliable power supply and support South Africa in meeting its energy needs.”