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Mozambique’s gas boom dream under threat

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The small, palm-fringed fishing town of Palma was meant to become a symbol of Mozambique’s glittering future, transformed by one of the world’s largest liquefied natural gas projects.

But construction has fallen far behind schedule and the town’s fate is uncertain after gas prices fell and the government became engulfed in a $2bn debt scandal.

Tucked between the turquoise waters of the Indian Ocean and thick tropical forests, Palma remains a sleepy village of 3,000 people, still waiting for the promised arrival of new jobs and infrastructure.

The discovery of gas reserves in 2010, estimated at 180-trillion cubic feet (five trillion cubic metres) in the surrounding Rovuma Basin, was the biggest natural gas find in recent decades.

Experts have predicted that Mozambique could become the world’s thirdblargest exporter of liquefied natural gas (LNG) – and an African version of wealthy Qatar.

Plans to exploit the reserves moved fast, and Palma’s residents were soon looking for opportunities to lift themselves out of poverty in one of the world’s poorest nations.

“It’s only through such projects that we will get proper jobs because otherwise we just depend on the sea,” said 46-year-old fisherman Pedro Abuda-Nchamo.

Since the discovery of the gas, the face of the town has started to change.

Excavators and construction vehicles are working on the planned liquefaction plant and export facilities.

A gated residential complex for the anticipated influx of skilled workers is almost ready, and the town’s first shopping mall is being built.

But the much-touted gas project has run into strong headwinds.

Initial estimates were that the first LNG would come on stream in 2016 but now it is expected in 2023 – or later.

The plunge in global gas prices has led energy companies to slow down capital expenditure.

Meanwhile the government in Maputo is caught up in a debt scandal that has triggered an economic crisis unseen since the end of the southern African country’s civil war in 1992.

Vast secret debts

News emerged last year that the government had borrowed massively – including three secret loans amounting to $2bn – between 2012 and 2014 to fund a coastal protection project.

As a result, the International Monetary Fund and World Bank have suspended budgetary support.

The loans, which the government is unable to repay, were taken out in anticipation of the gas windfall that remains elusive.

“The government thought it would repay the loans with gas money,” said Borges Nhamire, analyst with CIP, an anti-corruption non-governmental organisation.

Analysts fear that Mozambique’s state-owned Empresa Nacional de Hidrocarbonetos (ENH), a minority partner in the gas project, may now struggle to raise its contribution of the share capital – although ENH insists it will honour its share of the deal.

Meanwhile, other players in the multi-billion-dollar gas project appear to be making investment decisions.

In March Exxon announced that it was buying for $28bn, a 25% stake in Italian energy giant ENI’s Mozambique gas resource.

That same month another major player, US oil and natural gas company Anadarko, also said it was investing $770m in its deepwater project in Mozambique where it “expects to continue advancing” and that it has “made good progress on the legal and contractual framework”.

But Nhamire said it will take a “long time” for any benefits from the gas project to reach average Mozambicans.

‘Blessing or curse’?

The long-running conflict between the ruling Frelimo party and opposition Renamo fighters engaged in a low-key armed insurgency resurfaced in 2013, but a ceasefire in place since December has raised hopes of progress towards permanent peace.

Yet the debt controversy has dented investor confidence and provoked fears that Mozambique is another African victim of the “resource curse”.

“It’s been really a pretty serious disaster that impacted right throughout the economy,” said Peter Fabricius, a consultant with the South Africa-based Institute of Security Studies.

“What it does indicate is serious deficiency in governance and that is at the heart of any discussion about whether resources are going to become a blessing or a curse.”

For a decade until 2014, Mozambique experienced galloping growth of more than seven percent annually, fuelled by foreign capital inflows on the back of coal and natural gas discoveries.

But growth has slowed by half from 6.6% in 2015 to 3.3% last year, and the central bank in April forecast “a continuation of the weakening of economic activity”.

“Foreign direct investment declined by 20% indicating a decline in confidence in the economy,” said the World Bank in its latest country overview.

For Palma residents, delays in the start of the gas project are breeding anxiety and frustration.

“They promised that when the companies come we would get jobs but until now it has not happen and people are complaining,” said Amade Mussa, a village leader.

The government insists the Palma project is still on track and that local people will benefit even as some have to be relocated for the construction of the gas terminal.

“Our priority is to take that community out of poverty,” Land Minister Celso Correia told AFP.

Source: AFP

 

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Energy

Power Supply Efficiency: Dangote Cement PLC Partner GE to Digitize Its Cement Plants to Boost Reliability

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GE’s APM Digital Solution Will Help Reduce Unplanned Downtime and Enhance Operational Performance

LAGOS, Nigeria, October 24, 2019- GE Will Modernize Seven GE LM6000PC Aeroderivative Gas Turbines and Install Its Asset Performance Management (APM) Digital Solution at Dangote Cement Plants in Obajana and Ibese, Nigeria;Contract Includes Service Agreement Extension for Additional 50,000 Operating Hours for Each of the Seven GE LM6000PC Aeroderivative Gas Turbines; GE’s APM Digital Solution Will Help Reduce Unplanned Downtime and Enhance Operational Performance; GE’s Total Plant Solutions Will Improve Power Supply Efficiency and Help Extend the Life of the Cement Plants

GE (NYSE: GE) and Africa’s leading cement producer Dangote Cement Plc signed an agreement to deploy GE’s Asset Performance Management (APM) digital solution to reduce unplanned downtime and enhance performance at its two cement plants in Obajana and Ibese, Nigeria. The project includes extending the current service agreement for an additional 50,000 operating hours for the seven GE LM6000PC aeroderivative gas turbines installed at the sites. GE’s total plant solutions will improve efficiency, reliability essential to continuous operations and the plants’ business strategy.

“Power supply is both a key input and a major cost in our manufacturing process,” said Ravi Sood, Operations Director, Dangote Cement Plc. “Operational performance is crucial to our cement plant’s overall productivity, directly affecting end products. Being at the front of cement production in Africa, we believe extending our services agreement with GE and the introduction of digital solutions will allow us to improve efficiencies, anticipate further reductions in unplanned downtime and become more self-sufficient in power production in a country which, with approximately 190 million inhabitants, is the most populous country in Africa and the seventh most populous country in the world.”

APM leverages cutting-edge technology to monitor the performance of power generation assets to reduce downtime, avoid turbines damage and remotely predict and resolve issues. APM sensors will be installed not only on the seven aeroderivative turbines, but also on their associated generators and gear boxes to predict and accurately diagnose issues with greater accuracy before they occur.

“Energy infrastructure is getting smarter, and digital solutions allow not only the shift from traditional calendar-based repairs to predictive maintenance, but they also increase power asset availability and reliability,” said Elisee Sezan, CEO for GE’s Gas Power businesses in sub–Saharan Africa. “We are proud to continue our 13-year collaboration with Dangote Cement to help them support Nigeria and other African countries towards achieving self-reliance and self-sufficiency in the world’s most basic commodities.”

Also Read: Serengeti Breweries Limited (SBL) marks growth milestone with a new corporate logo

The agreement underscores GE’s commitment to work collaboratively with its customers using the APM software to optimize their performance of assets, increase reliability and availability, minimize costs and reduce operational risks. Earlier this year, GE announced the first digital solutions order in sub-Saharan Africa for Azito in Ivory Coast  improving power plant output, reliability, availability and operational performance.

GE

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Cameroon: Three power plants financed by the African Development Bank to reduce power cuts

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Image credit: African Development Bank

For many years, Cameroon’s national electricity supply has been notoriously unreliable and subject to power cuts. The last significant electric system outage, which lasted eight hours, occurred last March and affected several of the country’s regions (the Far North, North, Littoral, Adamaoua, South and Centre regions).

However, three projects financed by the African Development Bank for $121.4 million in 2010-2011 are at last starting to provide long-suffering Cameroonians with much more reliable electricity.

Completion of work on transport lines, line maintenance and especially the replacement of wooden electricity transport poles with concrete poles are all part of the system improvements, whose goal is to increase the quality and reliability of public access to electricity.

The Lom Panga storage reservoir project is complete, but the dam’s generating plant is still under construction. In the meantime, two other power plants, Kribi and Dibamba, have begun working  to strengthen Cameroon’s generating capacity.

In November 2011, the African Development Bank awarded $62.9 million for the construction of Lom-Pangar, the hydroelectric generation’s ‘lungs’ in the country’s East region. The project included the construction of a reservoir (6 billion cubic meters of water retained) for regulating the Sanaga’s flow and optimising generation during low water periods at the Song Loulou plant (335 MW) and the Edea plant (224 MW). The production from these two plants has grown from 450 MW in 2011 to 729 MW now.

A 30 MW hydroelectric generating plant is under construction at the base of the dam. It will be linked to the Bertoua thermal plant by a 105 km 90kV line that should start to work in May 2021 following the installation of an evacuation station and the construction of its four turbines. Lom-Pangar will provide electricity to 150 locations in the region and will significantly reduce power cuts in the area.

“The Lom-Pangar dam will help save water in other reservoirs,” said Theodore Nsangou, the General Director of the Electricity Development Corporation (EDC), in an interview with a government publication in March 2018.

The 216 MW capacity Kribi gas-fired generating plant began to work in 2013 after receiving $32.8 million from the African Development Bank in July 2011 for an expansion project. Its production goal is 330 MW. Currently, the power plant has a 100 km 225 kV transport line connecting it with the Magombe substation in the Edea region in the country’s South region. The plant operates with natural gas (with light fuel oil as emergency backup) from the Sagana South offshore gas field.

During the dry season, the Kribi plant and its nine simple cycle gas turbines are truly the system’s “oxygen”, maintaining the country’s energy flow, particularly to the South’s interconnected system, which receives its electricity from Kribi.

The Kribi gas-fired generating plant and the Dibamba generating plant provide access to electricity for close to half of Cameroon’s population.

The Dibamba heavy fuel oil generating plant was also designed to meet the serious problem of power cuts during the dry season. It was the first of the three plants to receive financial support from the African Development Bank of $25.6 million in April 2010. Built to mitigate the country’s shortage of electricity, high demand quickly outpaced its capacity the day after it began operations.

Located in the outskirts of Douala, Cameroon’s second largest city, Dibamba is an 86 MW thermal generating plant with a 2 km 90 kV transport line linked to the network serving the most remote and densely populated areas in the country’s West region.

Also Read Interview: African Energy Chamber Executive Chairman, NJ Ayuk on Transforming Africa’s Energy Sector

With an estimated 23,000 MW hydroelectric production capacity, Cameroon has the second largest hydroelectric potential in Africa and the 18th largest worldwide. The country plans to complete the development of its hydroelectric industries by 2035. Construction of the Nachtigal hydroelectric generating plan began in 2019 and will be complete in about five years, with an estimated generating capacity of 420 MW.

The African Development Bank has awarded a funding package of $154.8 million for the completion of this generating plant. Other development partners, such as the World Bank, the European Investment Bank and Proparco, are also involved.

African Development Bank

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UNDP, Sahara Group Target Energy Access To 10 Million Households In Africa

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New York, USA: September 24, 2019- The United Nations Development Programme (UNDP) and the Sahara Group have unveiled the Africa Renewable Energy Forum to boost access to sustainable energy for 10 million households in Africa through alternative energy initiatives and interventions.

Launched at the margins of the 74th UN General Assembly in New York, the Africa Renewable Energy Forum is expected to bolster ongoing partnership between UNDP and the Sahara Group that aims to create access to clean and affordable energy in Africa.

The forum will serve as a platform for policy discussions, multi-stakeholder collaboration and funding towards implementation of tailored renewable energy solutions across the continent. Ultimately, the platform will galvanise the political momentum needed to record significant progress through strong partnerships, effective regulation and mutual accountability.

The event had senior officials from both organisations in attendance including, Ahunna Eziakonwa, Regional Director and Assistant Secretary General for UNDP Regional Bureau for Africa, as Kola Adesina, Group Managing Director, Sahara Power Group, Pearl Uzokwe, Director, Governance and Sustaianability, Sahara Group, Bethel Obioma, Head Corporate Communications, Sahara Group and Babatomiwa Adesida, Private Sector Engagement Specialist, Sahara Foundation.

Cross section of delegates during the launch of the Africa Renewable Energy Forum in New York, USA at the sideline of the ongoing 74th UNGA.

Africa has the highest percentage of untapped hydropower potential in the world, with only 11% utilization capacity. Whilst the global electrification rate reached 89% in 2018 and 153m people gained access to electricity (WB Stats, May 2019), the biggest challenge remains in the most remote areas globally and sub-Saharan Africa in particular, where an estimated 573m people are not connected to grid power.

With over 600 million Africans having no access to electricity, Ahunna Eziakonwa said the continent urgently needs to embrace renewable energy sources to sustainably connect the poorest and hardest to reach households. “Access to energy will enhance the cause of poverty alleviation and also yield huge benefits for education, healthcare, production, and socio-economic development. The UNDP-Sahara partnership is extremely crucial as it will provide a model for engaging a wide range of stakeholders to address the continent’s energy challenge in line with the SDG framework,” Ahunna stated.

Also Read Cycles, Nigeria’s No.1 Bike-Sharing Platform Achieving The United Nations SDG Goal 11 – Damilola Soladoye

Kola Adesina said the initiative has the potential to create over one million jobs in Africa as the continent continues its march towards achieving the 2030 SDG Agenda. “Renewable energy is still in its infancy as far as Africa is concerned. We need unrelenting awareness initiatives to inspire a mindset shift to renewable energy in Africa with the various governments, private sector and development agencies leading the charge. At Sahara Group we believe that interventions like the UNDP-Sahara partnership will enhance productivity and shared prosperity in Africa.”

Sahara Group

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