12 NOVEMBER 2009 INTERNATIONAL WATER POWER & DAM CONSTRUCTION
INSIGHT
but the lack of transparency on the terms of
credit encourage criticism of such arrange-
ments. However, it could be argued that the
apparent absence of guarantees on govern-
ance and social benefit leave African govern-
ments with more room for manoeuvre. Apart
from providing much needed electricity, it is
hoped to irrigate 30,000ha of agricultural
land and create a tourist centre.
Generating capacity of 400MW will
be provided by three turbines and a 110m
high roller compacted concrete (RCC) dam.
Phase two of Bui began in December last
year, when the river was blocked in prepara-
tion for the construction of the main dam,
power house and spillway. Bui lies within
the same river system as Akosombo, which
has been affected by droughts over the past
decade, but Accra is confident that Bui will
improve the power supply situation, pro-
viding electricity for northern Ghana and
also Togo and Burkina Faso via the West
African Power Pool (WAPP). At present,
most power consumed in the north is gener-
ated at the Akosombo Dam in the south and
so the national power company, the Volta
River Authority (VRA), suffers substantial
transmission losses in transferring electricity
across the country.
Sinohydro also signed an engineering,
procurement and construction contract
with Zambia Electricity Supply Ltd (Zesco)
in November 2007 to expand the Zambian
portion of the Kariba scheme. The other half
of the project is located in Zimbabwe but
the $243M Kariba North Bank project will
provide Zambia with an additional 360MW
of generating capacity and therefore offers a
good ratio of investment to MW. Exim Bank
China is again involved, providing $206M.
Construction work is already underway
and is scheduled for completion in 2012
when Zesco hopes to step up the pace of its
rural electrification programme, although
some of the new power production could be
consumed by the mining sector. At present,
Zesco relies on importing electricity from
the rest of the Southern African Power Pool
(SAPP) during periods of prolonged low
rainfall but rising consumption elsewhere in
the SAPP and South Africa’s growing power
supply problems mean that this may become
a more unlikely option in the future, with
SAPP tariffs expected to increase.
Perhaps the biggest prize in Africa in
terms of securing access to natural resources
is Nigeria. With the continent’s biggest oil
and gas reserves, it has certainly attracted
the attention of Chinese investors, including
China National Offshore Oil Corporation
(CNOOC), which paid $2.3B for a 45%
stake in Nigeria’s OML 130 concession in
January 2006, while further investment in
oil assets has been made. However, many
planned infrastructural projects have stalled,
including $8.2B of promised Chinese invest-
ment in railway modernisation and the
development of the 3.9GW Mambila Dam
by China National Machinery & Equipment
Import & Export Corporation, as a host
of contracts signed by the previous govern-
ment of President Olusegun Obasanjo are
reviewed by the new administration. The fate
of the Mambila venture has therefore yet to
be decided.
In March, Sinohydro signed a deal with
the Benin Electricity Corporation (CEB) to
develop the 147MW Adjarala hydro scheme
on the Mono River, which forms part of the
border between Benin and Togo. According
to Chinese sources, the contract is worth
EUR282M and the scheme is scheduled to
come on stream during the first half of 2013.
Benin and Togo, which will jointly own the
project, have both relied heavily on imported
electricity from Ghana and Nigeria for many
years but could now become net exporters to
the WAPP. The completion of Adjarala could
make it less likely that spur pipelines from the
West African Gas Pipeline (WAGP) will be
developed to transport Nigerian gas to Togo
and Benin, as all of the WAGP target states
increase their hydro generating capacities.
Tekeze on the brink
On the opposite side of the continent, a
consortium of Sinohydro-CWHEC (49%),
China Gezhouba Water and Power Group
(30%) and local firm Sur Construction
(21%) is developing the Tekeze scheme in
Ethiopia. With a height of 185m, the dam
will be higher than that employed in the Three
Gorges project, although expected generating
capacity is far more modest at 300MW. All
output will be sold to the Ethiopian Electric
Power Corporation (EEPC) under a long
term power purchase agreement (PPA). Dam
construction was completed in February and
the first of its four 75MW turbines will be
brought on stream by the end of this year,
two and a half years after first electricity was
originally expected.
More recently, in September, the Ethiopian
Electric Power Corporation (EEPCo)
announced that it had signed agreements
with Chinese firms for another two hydro
schemes. Sinohydro is to construct the
$555M Chemoga Yeda project, which will
comprise five dams on five rivers in Amhara
state. No details of generating capacity were
given. The second contract was awarded
to the China Gezhouba Water and Power
Group for the development of the 254MW
Genale Dawa III scheme in the south of the
country, on the border of Somali and Oromia
states. Located on the Genale River, it will
include a 110m high dam and is priced at
$408M, with first electricity due in 2013.
If all of these schemes, together with a series
of projects without Chinese involvement, are
completed as planned, the Ethiopian govern-
ment could fulfil its ambition of becoming a
net power exporter within a decade but at
present the country continues to suffer from
power rationing. It has been reported in the
Ethiopian press that supplies have been cut
every second day over the past six months.
The biggest hydro project in Africa
with Chinese support is the Merowe Dam
in neighbouring Sudan, although China
International Water & Electric Corporation
is just one member of the development
consortium, which also includes Cegelec
of France and German firm Lahmeyer.
However, Exim Bank China is also pro-
viding a EUR240M (US$353M) loan, as
Beijing continues to demonstrate that it is
one of Sudan’s closest allies in the inter-
national community. Many foreign firms
have fought shy of investing in the country
because of accusations that such support
has helped fuel conflicts in south Sudan
and Darfur. Yet China National Petroleum
Corporation (CNPC) is now the biggest
investor in the Sudanese oil industry,
prompting Beijing to support a range of
infrastructural projects in the country.
The additional generating capacity provid-
ed by Merowe will be welcomed, given that
Sudan continues to be affected by power cuts.
The first 250MW phase of the project came
on stream in March but power shortages
were reported as recently as July. According
to the Sudanese government, all 1250MW
should be in place by the end of this year,
greatly increasing total Sudanese capacity. As
a result, the Sudanese ministry of energy and
mining has announced that power tariffs will
be reduced by 25-30% next July.
Outlook
It may seem unwise for African governments
recently freed from most of their debt burden
to be accepting new loans, on whatever
terms. Yet the lack of access to electricity and
the unreliable nature of many power systems
on the continent remain two of the greatest
obstacles to more rapid economic growth
and improved living standards. While 98%
of North Africans have access to electricity
at home, the figure is much lower in most of
Africa, falling to 5-10% in Uganda, Malawi,
Burkina Faso, Democratic Republic of Congo
and Mozambique, while the lack of reliable
figures for a host of other countries suggests
that electrification may have made even less
progress elsewhere.
More investment in thermal power projects
and renewables would produce a more bal-
anced generation mix but large hydro remains
the cheapest option for most African nations,
particularly away from the coastal strip. The
Chinese government and Chinese companies
are prepared to invest billions of dollars in
African hydro schemes that have been on the
drawing board for decades but which have
remained undeveloped because other gov-
ernments and private sector firms are either
unwilling or unable to develop them.
It is therefore understandable that so many
African governments are prepared to accept
such investment, even at the risk of inflating
their national debt. With so many infrastruc-
tural projects awaiting construction and so
much untapped hydro potential in Africa,
it would not be surprising if this wave of
Chinese investment in African hydro were to
continue for many years to come.
IWP& DC