Eskom seeks to double Ugandan business

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EskomPowerLines

Kampala - The Ugandan unit of South African utility Eskom, which manages plants generating almost half of the East African nation’s electricity, said it wants more than double the capacity it runs in the country.

Eskom Uganda, a unit of Eskom Enterprises, is interested in operating the 600-megawatt Karuma hydropower dam that’s being built by Beijing-based Sinohydro and a 183-megawatt project developed by China International Water and Electric, Simon Kasyate, a spokesman for Kampala-based Eskom Uganda, said in an e-mailed response to questions on April 9.

The government says its two plants may start generation in 2018.

The company’s experience in Uganda “plays well in positioning Eskom Uganda as a natural choice for such projects like the management and operation of huge hydropower plants,” said Kasyate.

The company can’t divulge strategic business information on when talks will start, he said.

Uganda, which has East Africa’s third-biggest economy, has installed capacity of 810 megawatts and peak demand of 509.4 megawatts, according to the electricity regulator.

The 250- megawatt Bujagali hydropower plant on the Nile River, in which Blackstone Group’s New York-based Sithe Global Power LLP has a stake, is the nation’s biggest producer of energy.

Industrial consumers include the local units of Coca Cola, Lafarge Cement and China Machine Building International, according to Kampala-based Umeme, the distributor.

Eskom has had a 20-year contract since April 2003 to operate and maintain the 180-megawatt Nalubaale and 200-megawatt Kiira hydropower plants on the Nile, 80 kilometres (50 miles) east of Kampala, the capital.

Uganda’s parliament last month backed a recommendation that Eskom’s concessions to run the plants be terminated on allegations that the contracts were biased in favour of the company, the state-run New Vision newspaper reported on March 28, citing parliamentary proceedings.

Eskom is confident it will run out its existing contracts, Kasyate said.

Umeme is controlled by CDC Group, a UK government owned fund, through Actis’ Actis Infrastructure 2LP, according to the distributor’s 2012 annual report.

Eskom is based in Johannesburg and produces more than 95 percent of power in South Africa, which has the continent’s biggest installed capacity of 42,500 megawatts.

One megawatt is enough capacity to power about 200 middle-income South African homes at peak times, Andrew Etzinger, a spokesman for the utility, said on March 7. - Bloomberg News



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