ELECTRICITY GRID ACCESS IN

SOUTHERN AFRICA

LAUNCH EVENT, JSE, JOHANNESBURG,

31 MARCH 2016

Electricity Grid Access in Southern Africa

Processes for private investors to develop new electricity plants within the region are still being developed and are not readily available.

The aim of this Guideline is to assist prospective IPPs to identify (and compare) the procedures required to licence a

new electricity generation facility within the region.

The project seeks to assist in achieving the SAPP’s vision to facilitate the development of a competitive electricity market in the region.

The JourneyMalawi- Malawi Energy

Regulatory Authority

South Africa- ESKOM - NERSA- SAIPPA- SAWEA- Cennergi

Namibia- NamPower

Zambia- CEC- LHP

Mozambique- Funae- Aggreko- DFID

Lesotho- LEWA

Swaziland- MNRE- SEC- Swazi Sugar

IndustryRERA conference- All regulators- SADC

Botswana- DOE- Cenkal Power

Station- Kalahari Energy

Zimbabwe- ZESA- CZI

SAPP- Coordination

Centre

SAPP CC: 17 SeptemberSouth Africa Workshop: 21 OctoberZambia: 26‐27 OctoberBotswana: 5 NovemberSwaziland: 23‐27 NovemberMozambique: 30 NovemberZimbabwe: 25‐26 JanuaryMalawi: 1 FebruaryLesotho: 5 FebruaryNamibia: 9 FebruaryHarare launch: 15 March

Questions posed to stakeholders

Wheeling

Key findings from visitsMalawi- Unbundling- Cost Reflective

Tariff- Low Rates of

Electrification

South Africa- REI4P - Open Grid Access

Namibia- REDs- Cost Reflective

Tariff- First Right of

Refusal

Zambia- Liquidity- Capacity

Interconnectors

Mozambique- Cheap Hydro- Financing- Feed in Tariff

Lesotho- Hydro- Drought

Swaziland- IPP

programme- Cogeneration

Botswana- Single Buyer- No Regulator- Financing

Barriers

Zimbabwe- Credit rating- Market Risk- Key Location

Summary of countriesCountry Penetration of 

IPPs in MarketOpportunities for IPPs

Botswana  Very low Opportunities exist, particularly in the coal sector

Lesotho  None Opportunities exist, particularly in the hydro and wind sectors

Malawi  None  The utility is in process of being unbundled; draft Feed‐In Tariff Policy exists but is still to be finalised

Mozambique  Low  Large potential generation capacity in hydro, natural gas and coal sectors; tariffs are not regulated  

Namibia  Low  IPPs can sell their electricity to other consumers in the market; renewable energy procurement programme is being implemented

South Africa High  The renewable energy and coal IPP procurement programmes provide opportunities for new entrants to the market. Competition is however very intense 

Swaziland  Very low Opportunities exist in the renewable sector, particularly biomass and hydro

Zambia  Low  Opportunities exist in the renewable sector, particularly hydro and solar

Zimbabwe  Low  Opportunities exist in the renewable sector, particularly hydro and solar; IPPs required to sell electricity to utility

Outcome

• There are opportunities for growth and development in the Southern African Development Community due to the opening up of many of the respective national markets to IPP participation.

• High level, SADC, support for the development of a competitive market is evident in the Southern African Power Pool’s mandate to increase trade across the region (SADC IPP framework being developed).

• Prospective investors’ knowledge and confidence will be boosted by having this diverse information presented in a concise but comprehensive format.

• Information can be compared across the respective countries, thereby assisting IPPs and investors in making the decision to invest, and ultimately in the pursuit of obtaining the appropriate generation licence.

• Policies• Plans• Legislation• Regulations• Regional frameworks• Market

places/exchanges/power pools

Guide for IPPs

Simon Thomas, Deputy Head of Mission, British Embassy Harare, Launches IPP GuideHarare 15 March