JOHANNESBURG - South Africa and indeed the region could have avoided the debilitating power cuts it has experienced since December 2007.
The Request For Information (RFI) recently issued by the Department of Energy shows needs can be met from the Southern African Customs Union (Sacu) countries, which are South Africa’s economic partners.
The 3000MW base-load required on an emergency basis, that is within the next three to five years, can be met by projects backed by the governments of Namibia, Lesotho and Botswana, subject to South Africa issuing power purchase agreements (PPA).
The discussion and debate about power generation in South Africa has always been insular and focused on the supply side issues and Eskom.
While the apartheid government in the 1980s reached or forced agreements for water treaties with Swaziland (Komati Basin Water Project), Lesotho (Lesotho Highlands Water Project), these were not followed by treaties with neighbouring Sacu states on power generation.
This was simply because South Africa was in a surplus position and was “mothballing” power plants (such as Camden and Groetvlei in Mpumalanga).
It was in that policy void that negotiations with South Africa for PPAs were initiated and conducted in the mid-2000s by Namibia and Botswana. Namibia punted the Kudu Gas Turbine Powered Project, based on the gas field offshore of Namibia.
The operators of the gas field, which have included Mitsui of Japan, state-owned Namcor (gas and oil corporation) and Nampower (the state-owned electricity producer and distributor) proposed a project of 1200MW of which 800MW would be available to South Africa. Why the Namibia government required the South African government PPA was that this would unlock the project financing.
The heads of state of the two countries at their bilateral meeting of September 2007 said in their joint communiqué that Eskom and Nampower must have reached agreement on a PPA by December 2007.
A number of downstream projects on the Atlantic Coast were predicated on Kudu Power Station, which included a phosphates/fertiliser project, a proposed 700km pipeline to Ankerlig in Cape Town, to power the Eskom plant (currently run on diesel) and so forth.
Discussions with PetroSA took place, in which the writer participated, but everything hinged on the PPA. Kudu Gas and its 1200MW to the Southern African Power Pool (SAPP) was shelved.
Botswana’s Mmabula power project lies on the Mmabula coal deposit, one of the largest coalfields in Southern Africa. The Botswana government and the project promoter conceived the Mmabula power station, fitted with the cleanest technology available, a project of 2400MW nameplate capacity, with upwards of 1400MW available to South Africa. The same as with Kudu Gas, a South African PPA was required to project fund the power station.
Mmabula, developed in the aftermath of SAPP talks of 2001/2002, which were held with the projected looming power deficit in 2007/2008, and was seen as a catalytic project that would be the centrepiece of a coal-to-oil project (like Sasol), a synthetics plant, a coalfield for export coal via a 1200km rail line to Walvis Bay in Namibia and other related projects.
Given then warm bilateral relations between Botswana and South Africa from the Mandela era, then President Ian Khama was invited for a state visit to South Africa in 2006 and addressed a joint sitting of Parliament (one of the highest honours to be accorded a visiting head of state). Promises were made for a PPA to be concluded “soon”.
Eskom never concluded a PPA with Botswana and the Batswana people were left wondering what were the underlying issues. A few years later Mmabula was canned, with all its ancillary projects that would have industrialised both Botswana and South Africa.
In Lesotho, the Lesotho Highlands Water Project, Phase II has commenced (2016-2026). Besides the Polihali Dam and 38km water tunnel to Katse to transfer water to Clarens and Gauteng, the Phase II project envisages a 1200MW hydro-power station.
In fact for the Lesotho government, pegging the hydro-power at 1200MW would address the anomaly of the Phase I Katse Dam which, although being the second highest dam in Africa, had no power generation component - South Africa was not interested in power then in 1986, sitting with a power surplus.
These three projects, of which two are ready to be dusted odd and fact-tracked, could bring in the region of 3000MW of base load to the South African grid within three to five years. This is more or less the same power generated by Eskom’s Amajuba Power Station in Volksrust, the largest power station in the Eskom Fleet prior to the commencement of the New Build Programme - Medupi and Kusile. This can be done off South Africa’s and Eskom’s balance sheet.
This insular thinking and lack of a spatial and regional economic dimension has stymied economic growth and development in South Africa and the Southern African Customs Union region. The base of any economic development programme is “bricks, mortar and steel” and China’s economic growth of the past 30 years has reinforced this lesson.
Where will Namibia, Botswana and Lesotho procure the cement, steel, skilled labour and capital for these projects? - South Africa. Is it not in South Africa’s interests that these countries are given the PPAs not only to plug the 3000MW that the RFI calls for, but for its economic growth from the doldrums?
Mhlangano Maphalala is a development consultant working in the SADC region and broader Africa, and in the period 2006-2010 was an SDI consultant to the DBSA/dti based in Windhoek and Maseru, respectively. He is currently primarily working on projects in Lesotho, South Africa, Namibia, Angola and Ghana.
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