14 April Independent Producers joining public Utilities The Future of African Electricity supply?

Transcription

1 14 April 2014 Independent Producers joining public Utilities The Future of African Electricity supply?

2 CONTEXT Location: Central Africa in the Guinea gulf Surface: km2 Hydroelectric potential: 115 TWh Population 20 millions inhabitants Access to electricity ratio: 48.2 % Consumption per inhabitant/ 240 kwh

3 Main Social and Economic Projects impacting electricity demand Social housing Agri-food processing complex and development of cotton sector Port development and oil refinery extension Bauxite Urban development and social housing Mining (Nickel,cobalt, etc.) Deep sea port, steel complex Mbalam: Iron mining

4 Electricity Sector in Cameroon AES SONEL ( 56 % AES and 44 % Government), an integrated utility is currently the exclusive operator of Generation, transmission and distribution in Cameroon ~28,000km distribution and transmission lines throughout the country >900,000 supply points with >6 million customers served and 5 bilateral customers Customers with demand in excess of 1MW have been free to negotiate energy purchases with 3 rd parties since 2006, however, there is currently no active market players aside from AES Significant cross-subsidization existing between MV and LV customers must be resolved prior to adopting more competitive market 4

5 Cameroon Electricity sector/ Installed capacity Installed capacity at SONEL of 949 MW and limited under Concession to 1,000MW (self-built), 2 IPPs with capacity 302 MW (Dibamba and Kribi) 77% capacity and >90% output is hydro Capacity and energy purchase contracts between SONEL and Dibamba and Kribi Purchased power expected to become significant energy source for SONEL and a significant component of its variable cost structure Necessity for enhanced clarity regarding mechanism for automatic inclusion of all power purchase costs into SONEL tariff (and/or subsidization) DPDC is jointly owned by AES (56%) and the Government (44%) Built in 2009 it is a heavy fuel 86 heavy fuel plant at Dibamba in the outskirts of Douala KPDC is jointly owned by AES (56%) and the Governemnt(44%) Built a 216 MW gas fired plant at Kribiin 2013

6 Continued Demand Growth Provides Opportunity for New Generation and Growth at SONEL ~7 % average demand growth since 2001;7.5% since 2010 Government growth plan to add additional aluminum smelters, industrial projects (steel, auto production, cement), and mining (cobalt, diamonds) requires up to 4,000 additional MW by 2025 Possibility for new IPPs as well as expansions of Dibamba and Kribi Nachtigal is a 400 MW hydro under development by EDF and IFC, commissioning expected in 2019.

7 CONTEXTE : CONTRAINTES DE LA DEMANDE COMMANDENT LE PLACEMENT A TEMPS DE NOUVEAUX OUVRAGES Ext. Kribi Ph.1 Ext. Kribi Ph SONG NDONG Ph.2 SONG NDONG Ph NACHTIGAL (?) MW MEMVELE KRIBI LOM PANG. USINE PTU DEMANDE PLACEMENTS DEMANDE+RESERVE 5%

8 Electricity Sector Policy and Structural Reforms Underway since Electricity Law and Implementing Decrees, developed with World Bank participation, created the electricity regulator and allowed for 2001 privatization New Electricity Law promulgated in December 2011 continues sectorial reform and is intended to support further investment in the country Implementing decrees currently underway to define the modalities of the new Law AES SONEL s current Concession will need to be adjusted to align with the New Electricity Law

9 New Electricity Law Requires alignment of Concession Key points : Transfer of the Transmission Concession and Transmission Operations to a government owned entity Transfer of storage dams and water management responsibility to governmental entity Possibility for industries to be granted concessions to build generation capacities and to own transmission lines

10 Main characteristics of Dibamba and kribi projects Main parties: Ministry of water and Energy Ministry of Finance ARSEL (regulator) SNH : governmental assets management company for the hydrocarbons sector

11 PROJECTS STRUCTURING 11 Lenders DFIs IFC, BEI, Proparco, BDEAC, BAD + Local banks AES Corp (56%) Government (44%) Government Loan agreements + Guaranties: - Plant site - Tools and equipment - Projects revenues SNH Gas contrac t KPDC/DPDC PPA AES SONEL (offtaker) License for generation and sale Land tittle Environmental permits Direct agreements with lenders Partial guaranty of local loans (World bank) over 13 years Guaranty of fiscal and legal risks Shareholders agreements

12 Lessons learnt and Ongoing policy clarification activities Need of clear and consistent sectorial policy Need of close cooperation and continued dialog between government and project sponsor Need of institutional framework for IPPs to speed up implementation process but also need of flexibility to adapt to the specific constraints of a project (license or concession, expropriation, rate of return guaranty, Governmental support, guaranty for local financing, etc.). Need of pragmatism