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Eskom's African Privatisation Footprint 2000-2002

Eskom's Reach in Africa
by Brian AsheEarthLife Africa eThekwini
August 16th, 2002

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Eskom, South Africa's giant power utility and a leader in utility privatisation, will have a strong presence at the World Summit for Sustainable Development in Johannesburg. Eskom, through Eskom Enterprises, currently has a presence in almost 30 countries on the continent. Just a few examples are noted below.

Gambia

In June 2000, Gambia's National Water and Electricity Company (Nawec) signed a US$ 75 million deal with Eskom to take charge of its power, water and sewerage activities. Eskom officials said they hoped to improve power and water supplies. Gambian officials have stated that the World Bank was expected to back the project with a $60 million loan.

Swaziland

In October 2001, an agreement was signed by the board with South Africa's electricity giant, Eskom, to provide power to the kingdom through February next year for 11 million US dollars. Usually, only 20 percent of the country's power is generated locally, with the rest imported, to the detriment of the nation's balance-of-payments.

The Swaziland Electricity Board is one of the three largest government-owned public enterprises up for privatisation, along with the state-owned radio and television services. Labour unions oppose privatisation of public enterprises because of potential job losses created by downsizing such companies when they go private.

Southern Africa

The Multi-lateral Investment Guarantee Agency (MIGA) has issued two guarantees totaling $69 million to Eskom, the South African electricity utility, to cover loans for investments in Motraco-Mozambique Transmission Company SARL. The investments are for the construction and operation of two 300-kilometer, 400- kilovolt overhead transmission lines and substations that will interconnect South Africa, Swaziland, and Mozambique. The project, a joint venture between the three countries' national power companies, will supply power to an aluminium smelter, increase the availability and quality of electricity for local residents, and provide the electricity infrastructure needed for the development of other large industrial projects in the region. The MIGA guarantees cover the investment against the risks of expropriation, and war and civil disturbance.

Nigeria

In October 2000, the Nigerian Electrical Power Authority (NEPA) signed a partnership agreement with Eskom to help improve electricity supply. Eskom will help develop NEPA's repair capabilities, execute transmission line projects, and participate in rehabilitating, operate and transfer (ROT) schemes for the running of Nigeria's power stations. In December 2001 Shell announced in that it had been awarded a ROT contract for units 1-4 of the Afam power plant, and a lease operate and transfer contract for Afam's fifth unit. Eskom is expected to provide management of maintenance and operations at Afam.

Libya

Eskom Enterprises and Gecol, the Libyan power utility, have formed a local joint venture company called Gesco that will provide consulting and commercial services to Gecol. Projects, including the rehabilitation of the Benghazi and Tobruk Power stations and the secondment of Eskom Enterprises' staff to Gesco to provide technical advisory services, will be undertaken by the joint venture.

Iraq

A joint committee with Eskom Enterprises and the Iraqi Electricity Commission (IEC) met in June this year to discuss energy projects in Iraq. These potential projects include power plant rehabilitation, transmission substations, telecommunications and the supply of electrical equipment.

Zimbabwe

In November 2001, Eskom signed a contract with the Zimbabwean power authorities ZESA to manage, operate and maintain the Hwange power station. The contract is valued at 3m and provides for a team from SA to fill key positions at Hwange.

Malawi

The Malawian government has asked Eskom Enterprises to provide a team of three specialists for Eskom to turn around the performance of the Malawi utility. The 12-month project began in July and the Malawian government has the option to extend the contract for an additional year.

Zambia

In December 2001 Eskom Enterprises has bought a 51% shareholding in Zambia's Lusemfwa Hydro Power Company. Lusemfwa Hydro Power Company owns two hydropower stations at Mulungushi and Lusemfwa, Zambia, with a combined capacity of 36MW. Rotek, the heavy engineering subsidiary of Eskom Enterprises focusing on heavy engineering within the power sector, will be responsible for refurbishing the power plants. Power from the stations will be fed into the Zambia National Grid.

Mali

In July 2001, Eskom Enterprises signed a contract valued at over R700m in Mali. The contract award for a 15year operation and maintenance contract for the new Manantali hydro station in Mali and its associated high voltage transmission system. Manantali will provide electricity to Mali, Mauritania and Senegal.

Brian Ashe is with EarthLife Africa eThekwini, a South African environmental justice group