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Transfer of power – developing a regional electricity generation market across Southern Africa

Richard Metcalf

A revitalised regional market in electricity may be coming closer at last. After years in which regional transmission lines have become congested and cross-border sales have declined, there are signs that change is finally on the way.

In recent years Southern Africa has run out of excess generation capacity. Many regional transmission lines have become congested and the resulting constraints on the ability to wheel power has held back the evolution of trading activity as well as the development of a truly regional market in electricity. It appears there is now a realisation among utilities in the region of the need to cooperate in developing new transmission facilities.

The concept of a regional market in electricity has been just that – a concept. So what has changed to bring it closer to reality? The agent for change is the Southern African Power Pool (SAPP). From its headquarters in Harare, SAPP has begun to launch a number of projects specifically aimed at alleviating transmission congestion and bottlenecks through the construction of new cross-border interconnectors.

Earlier in 2015 SAPP appointed a transaction advisory team to implement the MoZiSa project. The project aims to develop new interconnections between Mozambique, Zimbabwe and South Africa, with the objective of alleviating the current wheeling constraints on the existing Central Corridor covering ZESCO, ZESA, BPC and Eskom and facilitating trade across the region.

Now SAPP is looking to improve interconnectivity between Botswana and South Africa. On 29 September 2015 SAPP announced a new tender for the appointment of transaction advisers to assist with a project to be known as the Botswana – South Africa (BOSA) project. The BOSA project has similar rationale and objectives to the MoZiSa project – namely alleviating congestion on existing lines, improving system stability and facilitating improved trading.

SAPP is not doing this on its own. It is being supported by funding managed through the Development Bank of Southern Africa (DBSA) and sourced from a range of programmes and funds in South Africa and in the region. SAPP will in turn work closely with the utilities of the SAPP member countries. Nonetheless, the role of SAPP as promoter of these and other initiatives gives new life to the concept of a real and active regional market in electricity.

More information about SAPP and the projects can be found at www.sapp.co.zw.

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Our understanding of Africa’s markets stems from extensive experience on the ground. Through our Inside Africa blog, we aim to apply this insight to provide you with timely commentary on the latest developments across Africa, as well as insight into the many nations that make up this vast continent.

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