ELECTRICITY INFRASTRUCTURE DEVELOPMENT FOR ECONOMIC GROWTH BY CHRISTOPHER MUBEMBA DIRECTOR TRANSMISSION - ZESCO LTD

Transcription

1 ELECTRICITY INFRASTRUCTURE DEVELOPMENT FOR ECONOMIC GROWTH BY CHRISTOPHER MUBEMBA DIRECTOR TRANSMISSION - ZESCO LTD

2 TABLE OF CONTENTS 1.Background 2.Current Status 3.Investment Portfolio 3.1 Generation Projects 3.2 Transmission Projects 3.3 Distribution Projects 4.Conclusion 2

3 INTRODUCTION ELECTRICITY IS A KEY DRIVER OF ECONOMIC GROWTH & MAJOR INPUT IN ALL ECONOMIC SECTORS - AGRICULTURE, MINING, MANUFACTURING AND TOURISM UNTIL RECENTLY ZESCO S ELECTRICITY GENERATING CAPACITY WAS AT 1.6GW (99% HYDRO) NET EXPORTS ROUGHLY 5% OF TOTAL GENERATION (MOSTLY TO NAMIBIA, BOTSWANA AND CONGO D.R.) UNTIL RECENTLY THE PEAK DEMAND FOR ELECTRICITY WOULD EXCEED GENERATION CAPACITY BY ABOUT 300MW DURING PEAK ZAMBIA HAS EXPERIENCED A SUSTAINABLE ECONOMIC GROWTH OVER THE LAST FIVE YEARS DESPITE GLOBAL RECESSION, RESULTING IN: INCREASED DEMAND FOR ELECTRICITY FROM ALL SECTORS DEMAND OUTSTRIPPING AVAILABLE CAPACITY DURING PEAK HOURS (250MW SHORTFALL) ZESCO IS INVESTING IN NEW INFRASTRUCTURE TO COPE WITH GROWING DEMAND 3

4 MW FACTFILE ELECTRICITY DEMAND NATIONAL MAXIMUM DEMAND IS NOW ESTIMATED AT MORE THAN 1650 MW WITH PROJECTED GROWTH OF 3-4% p.a. ACCESS TO ELECTRICITY: 22% IN URBAN AREAS AND 3% IN RURAL AREAS Demand Forecast for Zambia Demand Years 4

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6 ZESCO 18/06/13 6

7 GENERATION PROJECTS REHABILITATION PROJECTS COMPLETED IN MAJOR GENERATING STATIONS STATION CAPACITY BEFORE PRP CAPACITY AFTER PRP KAFUE GORGE 900 MW 990 MW KARIBA NORTH BANK 600MW 720MW VICTORIA FALLS 108 MW 108 MW 7

8 GENERATION PROJECTS REHABILITATION AND UP-RATING PROJECT COVERING SMALL HYDROPOWER GENERATING STATIONS STATION CAPACITY BEFORE CAPACITY AFTER LUNZUA 0.75 MW 14.8 MW - (2014) MUSONDA FALLS 5.0 MW 10.0 MW - (2015) CHISHIMBA FALLS 6.0 MW 14.8 MW - (2016) LUSIWASI LOWER 12.0 MW 86.0 MW - (2018) 8

9 GENERATION PROJECTS NEW HYDROPOWER GENERATION PROJECTS INSTALLED CAPACITY TARGET YEAR OF COMPLETION KARIBA NORTH BANK - EXTENSION (PEAKING PLANT) 360 MW MW MW ITEZHI-TEZHI MW 2015 LUSIWASI UPPER 15.0 MW

10 TRANSMISSION PROJECTS TRANSMISSION ASSETS VOLTAGE DISTANCE (KM) 330 KV 2, KV KV KV KV 1,037 HIGH VOLTAGE SUBSTATIONS 27 NATIONAL CONTROL CENTER 01 REGIONAL CONTROL CENTERS 03 DISTRIBUTION ASSETS 66KV 2,180 33KV 2,100 11KV 1,037 SUBSTATIONS 5,000 10

11 LOAD FORECAST Year FORECAST MAXIMUM DEMAND (MW) FORECAST SHORTFALL (MW) 1,579 1,592 2,389 2,595 3, ,179

12 POWER REHABILITATION PROJECT (PRP) OVERALL OBJECTIVE WAS TO SUPPORT THE GOVERNMENT S OBJECTIVES OF ENHANCING THE ABILITY OF ZAMBIA S ELECTRICITY SUPPLY INDUSTRY TO PROVIDE ELECTRICITY AT LEAST COST AND IN AN EFFICIENT AND SUSTAINABLE MANNER TO STIMULATE MORE AND INCLUSIVE GROWTH IN THE ZAMBIAN ECONOMY. THE REHABILITATION WORKS INVOLVED TWO MAJOR COMPONENTS; GENERATION INFRASTRUCTURE AND TRANSMISSION AND DISTRIBUTION PRP WAS FUNDED BY BILATERAL AND MULTILATERAL AGENCIES LED BY THE WORLD BANK. GOVERNMENT AND ZESCO ALSO PARTICIPATED PROJECT COST: OVER USD320 MILLION 12

13 POWER REHABILITATION PROJECT (PRP) Scope included rehabilitation and uprating of the three major hydropower stations, i.e. Kafue Gorge, KNBPS and Victoria Falls Other works included reinforcement and rehabilitation of some transmission and distribution infrastructure The major achievements of the PRP has been the uprating of the Kafue Gorge Power Station from 900 to 990 MW, the reinstating of the Victoria Falls Power Station to its full generating capacity of 108 MW as well as the up-rating of Kariba North Bank power station from 600 MW to 720 MW. Total generation capacity added to system from the PRP is 210 MW 13

14 ESTIMATE OF EXPENDITURES ON POWER REHABILITATION PROJECT (PRP) VICTORIA FALLS POWER STATION USD53.7MILLION KAFUE GORGE POWER STATION - USD 85.5 MILLION KARIBA NORTH BANK POWER STATION USD81.4MILLION THEREFORE TOTAL COST USD MILLION ESTIMATED COST FOR A NEW 210 MW POWER STATION >US$ 500 MILLION 14

15 NEW GENERATION PROJECTS KARIBA NORTH BANK EXTENSION 2x180MW OWNER: ZESCO LIMITED/KNBEPC COST: USD 420M DURATION: 4 YEARS OPERATION: 2013/14 Unit No. 5 commissioned in December 2013 Unit No. 6 commissioning in progress 15

16 NEW GENERATION PROJECTS ITEZHI TEZHI HYDROPOWER PROJECT (120 MW) OWNER: PPP (ZESCO/TATA) COST: USD 232M DURATION: 3.5 YEARS OPERATION: 2015 STATUS: ENABLING WORKS COMPLETED, MAIN WORKS IN PROGRESS AT OVER 40% COMPLETE 16

17 NEW GENERATION PROJECTS Kafue Gorge Lower Hydropower Project (750 MW) OWNER:PPP (ZESCO/EQUITY PARTNER) COST:USD 2 BILLION DURATION: 6 YEARS OPERATION: 2019 STATUS: FEASIBILITY REPORT COMPLETE, PROJECT PREPARATORY ACTIVITIES UNDERWAY. PROCUREMENT OF CONSULTANTS & ADVISORS IN PROGRESS. GRZ HAS ALLOCATED US$ 186 M (ZMK930 TR) FROM THE EURO BOND FOR THE KGL PROJECT 17

18 NEW GENERATION PROJECTS SMALL HYDROS LUSIWASI LOWER 86 MW US$164M EPC CONTRACT AWARDED LUNZUA-15 MW US$52M OVER 65% PROGRESS, COMPLETION ON SCHEDULE FOR SEPTEMBER 2014 LUSIWASI UPPER -15 MW US$47M EPC CONTRACT AWARDED REHABILITATION AND UPRATING OF CHISHIMBA FALLS: MW US$46M EIA APPROVED, TENDER DOCUMENT PREPARATION UNDERWAY REHABILITATION AND UPRATING OF MUSONDA FALLS: 5-10 MW US$32M EPC CONTRACT AWARDED SHIWANG ANDU 1 MW USD4.15 MILLION PLANT COMMISSIONED IN DECEMBER

19 NEW GENERATION PROJECTS POTENTIAL SITES BATOKA GORGE 1600 MW MPATA GORGE 540 MW DEVIL S GORGE 500 MW MUMBOTUTA FALLS MW MAMBILIMA FALLS SITE I 202 MW MAMBILIMA FALLS SITE I 124 MW KABWELUME FALLS - 62 MW KUNDABWIKA FALLS 101 MW MUTINONDO - 40 MW LUCHENENE 30 MW MKUSHI 65 MW 19

20 TRANSMISSION PROJECTS PENSULO KASAMA AND PENSULO CHIPATA 330 KV PROJECT The objective is to improve power quality in Eastern, Muchinga, Northern and Luapula provinces and to increase transmission capacity to these areas Scope: about 382 km of 330 kv lines (Pensulo - Kasama) and 285 km of 330 kv lines (Pensulo - Chipata) with associated substations Cost: USD335 million Status: funds secured, EPC contractor is TBEA, EIA approved, survey works completed, tower spotting and foundations being done Funding: Industrial and Commercial Bank of China Construction Period: 30 months from August

21 CONNECTION OF NORTH WESTERN PROVINCE TO NATIONAL GRID The objective is to support the increased access to electricity and improved quality of service by displacing the expensive diesel generators Scope: about 800 km of 132 km transmission lines, 330/132 kv substation and 132/33 kv substations in Mwinilunga, Kabompo, Mufumbwe, Zambezi, Lukulu and Chavuma Cost: USD150 million Funding: Loan agreement signed with NORDEA of Sweden and Standard Bank of South Africa Status: Contract signed with ELTEL of Sweden Construction period 24 months 21

22 TRANSMISSION PROJECTS KARIBA NORTH BANK EXTENSION POWER EVACUATION PROJECT The objective is to increase transmission capacity from KNBPS to the grid for the evacuation of power from KNBE project Scope: 123 km of 330 kv lines and substation works Cost: USD62 million Status: EPC contractor is Sinohydro, EIA approved, survey works and bush clearing completed. Towers being erected. Substations works complete Funding: China EXIM Bank Construction Period: 18 months (by November 2013 now May 2014) 22

23 KAFUE TOWN MUZUMA VICTORIA FALLS TRANSMISSION LINE UPGRADE The objective is to increase transmission capacity southwards for export to and from SAPP and provide evacuation path for new generation projects Scope: Upgrade 348 km of 220 kv line to 330 kv Cost: USD100 million Status: Consultant Mott McDonald. Three lots for the tenders Transformers and reactors, substations and lines Funding: World Bank and European Investment Bank Construction Period: 18 months 23

24 ITT MUMBWA LUSAKA WEST TRANSMISSION LINE PROJECT The objective is to provide power evacuation for the ITT power station Scope: 142 km of 220 kv line and 134 km of 330 kv line and associated substation at Mumbwa Cost: USD133 million Funding: EIB, AfDB and AFD Status: EIA completed and approved, survey and soil investigations completed. Procurement in progress lines and substations. Award given for substations 24

25 SUPPLY TO KALUMBILA MINE The objective is to supply power to the proposed FQM Kalumbila mine Scope: 500km of 330 kv double circuit line and 66 km of 330 kv single circuit line and associated substation at Kalumbila Cost: USD300 million Funding from Kalumbila Minerals Limited/ZESCO Status: EIA study completed, survey in progress, bush clearing and tower spotting Line by Kalpataru of India substations by ABB of Germany 25

26 CONNECTION OF LUANGWA DISTRICT TO THE GRID The objective is to support the increased access to electricity and improved quality of service by displacing the expensive diesel generators Scope: 187km of 132kV transmission, 2x10MVA 132/33kV Substations at Rufunsa and Luangwa, 60km of 33kV lines in Mpanshya, service connection to GRZ institution and 100km of 33kV lines in Luangwa Cost; USD63million Funding: EXIM Bank of India Status: PME of India. Line and substation works in progress. Construction period: 24 months (December 2014) 26

27 TRANSMISSION PROJECTS LUSAKA 132KV RING REINFORCEMENT PROJECT PHASE I The objective is to increase the transmission capacity of the Leopards Hill Coventry 132kV transmission line Scope: Reconductoring 28km of 132kV transmission, Installation of 2x45MVA 132/11kV transformers at Coventry substation Cost: USD6.3million Funding: ZESCO Limited Status: Tenders awarded for supply of conductor, supply of transformers and services 27

28 LUSAKA 132KV RING REINFORCEMENT PROJECT PHASE II The objective is to increase the transmission capacity of the Lusaka Transmission and Distribution Network Scope: Upgrade of capacity of 132kV transmission lines, increase capacity of existing substations, create new substations at 132/33kV, 33/11kV levels, construction new 33kV and 11kV lines Cost: USD210million Funding: World Bank, European Investment Bank and ZESCO Limited Status: Financing discussions completed. WB approved on 31 st May 2013, EIB approved March Construction period: phased 3 5 years 28

29 ZIZABONA The objective is to increase regional trade in power by increasing transmission capacity for north to south and east to west power trading Project promoted by Zimbabwe, Zambia, Botswana and Namibia Cost: USD230million Funding: Discussions initiated with potential financiers. DBSA, AFDB, KfW Status: technical and market studies completed, project governance documents prepared IUMOU, IGMOU signed. Joint Development Agreement to be signed by BPC. Will lead to signing of Shareholders Agreement TA, Consultantsto be engaged soon and SPV registration is underway 29

30 DISTRIBUTION PROJECTS ZESCO carrying out various projects to reinforce and rehabilitate the distribution infrastructure Distribution and expansion reinforcement project USD 100 million in progress Increased Access to Electricity Services, sponsored by WB, JICA and other financiers in progress 30

31 PLANNED CAPITAL INVESTMENT 2012/13 RESULTS FROM LOAD FORECASTS REVEAL FUTURE DEMAND/SUPPLY IMBALANCES. GRZ VISION OF ACHIEVING MIDDLE INCOME STATUS BY 2030 THIS DRIVES LONG TERM GENERATION, TRANSMISSION AND DISTRIBUTION INVESTMENT PLANS ZESCO PLANS TO SPEND ABOUT ZMK 29BN (US$5bn) ON ASSETS AND INFRASTRUCTURE OVER THE NEXT FIVE YEARS

32 THANK YOU 32