Here is a short summary of the major economic news of the past two weeks in Southern Africa.
The Cap40 team will now regularly publish news from the French consulate in Pretoria in order to give you fresh insights on the most important economic matters in the country and region.
Eskom grants steam generator replacement contract to Areva.
Areva is currently negotiating the financial closure of the contract with the South African utility. The French multinational will be in charge of the conception, manufacturing and installation of the generators, as well as the related safety studies.
Areva’s competitor, the Americano-Japanese Westinghouse Electric Company, challenged Eskom’s decision at Johannesburg High Court, and said it had filed an interdict to reopen the bidding process.
Located close to Cape Town, the French-built 1,800 MW nuclear power station is the only one in Africa. Its two reactors supply around 5% of South Africa's electricity.
The Cabinet has approved Tshesido Matona’s appointment as CEO of Eskom.
This decision follows the resignation of the previous CEO, Brian Dames. Mr Matona was formerly Director General of the Department of Public Enterprises. He also served as Director General of the Department of Trade and Industry (2006-2010).
The main challenge Mr Matona will have to face as Eskom CEO is the restructuring of the group which currently experiences critical operational and financial difficulties.
The Cabinet has approved the ratification of the treaty on the Grand Inga Hydropower Project.
The treaty, signed between the Democratic Republic of the Congo and South Africa, entails the supply of 2,500 MW by the DRC to South Africa, therefore securing part of the financing of the construction and participating to South Africa’s effort to divert from coal-powered electricity.
The Inga 3 project consists in the development of a generating capacity of 4,800 MW on the Inga site on the Congo River, as well as the construction of high-tension lines between DRC and South Africa. This project, critical to the energetic integration of the Southern African Power Pool, should be supported among others by the African Development Bank and the World Bank.
Anglo-Australian mining company BHP Billiton to create new venture.
In its effort to simplify its structure and focus on integrated upstream activities, BHP Billiton will operate a demerger and create two independent portfolios of assets.
The new company, called NewCo, will gather BHP Billiton assets which do not form part of the group’s core activities of iron ore, copper, coal and petroleum extraction.
The new entity’s South African assets will include BHP Billiton Energy Coal South Africa, aluminium foundries in Richard’s Bay and Samancor Manganese.
AngloGold Ashanti to withdraw from London Stock Exchange.
The South African mining company will only be listed on the New York Stock Exchange, Ghana Stock Exchange and Australian Security Exchange.
It already withdrew from Paris and Brussels in 2009, considering that those financial centres did not offer enough liquidity.
PetroSA to give up the option of a Floating Liquefied Natural Gas (FLNG) import terminal in Mossel Bay.
Considering the results of a feasibility study delivered by Worley Parsons, PetroSA has resolved not to pursue the project. The study highlights that the location is technically and commercially challenging, and that potential commercial and technical hazards would increase the cost of the FLNG facility.
PetroSA however emphasised that it was considering other location options for a FLNG plant in order to foster imports of gas into the Southern Cape and guarantee the supply of gas to Mossel Bay’s Gas to Liquid (GTL) complex.
The China Machinery Engineering Corporation will build a combined-cycle power plant in Angola.
The Angolan Ministry for Energy and Water will sign a contract with the Chinese company for an estimated USD 985 million. The plant will be built in the city of Soyo, where the gas liquefaction plant Angola LNG is located.
Angola’s generating capacity should increase fivefold by 2025.
Angola’s Ministry for Energy and Water emphasised that within the framework of the “Angola Energy 2025” plan, the generating capacity of the country should rise from 2 GW to 9.9 GW by 2025 in order to respond to the rising demand and hit the target of an electrification rate of 60%.
The plan is estimated to cost USD 20 billion, with the private sector involved in the installation of 3.2 GW, and renewable energies covering up to 800 MW.
China Railway Construction has completed the rehabilitation of the Benguela Railroad.
The 1,344 km long line stretches from the port of Lobito, on the Atlantic Ocean, to the border with DRC. It aims primarily at easing the transport of copper from the Copperbelt, including DRC’s Katanga and northern Zambia.
Simultaneously, the port of Lobito has been inaugurated after having gone through rehabilitation and extension works including the construction of ore and container terminals.
Construction of Soyo GTL plant will be re-launched in 2015.
Production of Liquid Natural Gas (LNG) by the Angola LNG consortium will only restart in 2015, after it stopped producing in April 2014 following an accident at the plant.
Angola LNG is a joint-venture between BP, Chevron, ENI, Sonangol and Total. The Soyo plant cost US$10 billion and has a yearly production capacity of 5.2 million tons of LNG.
The African Development Bank (AfDB) has published a call to tender relative to Lesotho’s e-government project.
The AfDB requests expressions of interest for consultancy services to undertake a pre-investment study of Lesotho’s e-government infrastructure project.
This project aims at improving the communication between various ministries, databases, citizens, and the international internet network; strengthen the collection of data and improve the government’s internet portals to provide better access to information and services.
Maurician and Mozambican companies to collaborate for hydropower projects in Mozambique.
The construction of the two hydroelectric plants of Lupata and Boroma will be launched in 2015.
The Lupata plant (612 MW, USD 1.1 billion) will be constructed and operated by a joint-venture including Maurician holdings Hydroparts and Cazembe, the Mozambican public company EDM and the private company Sonipal.
The Boruma plant (210 MW, USD 572 million) will be constructed and operated by a consortium gathering the Maurician holding Rutland, EDM and Sonipal.
New Mozambican hydrocarbon regulation approved.
The new bill entails a minimum allocation of 25% of the gas produced to the domestic market, as well as a minimal share of concessions to be granted to the national public company ENH, which the government is willing to set at 15%.