South Africa is considering doubling the amount of electricity planned to be purchased from a multibillion-dollar hydroelectric power plant in the Democratic Republic of the Congo.
Increasing the purchase of South African electricity has become a key for companies that want to build and operate 11,000 megawatts of facilities. Congo in October named Chinese and Spanish groups as factory co-developers, which could cost $ 18 billion including transmission lines.
South Africa is committed to buying 2,500 megawatts from the dam, known as Inga 3, in the 2013 agreement between the two countries. In December, South African Energy Minister Jeff Radebe notified the Congolese government about the government's willingness to increase the amount to be purchased.
"I want to show interest in South Africa to get an additional capacity of 2,500 megawatts above what is done under the agreement," Radebe said in a December 19 letter to Bruno Kapandji, who heads the Grand Inga Grand Promotion and Development Agency. The letter, seen by Bloomberg, was verified by the agency.
Demand is decreasing
Plans for South Africa to double the future off-take of the dam came as a state-owned electricity company, Eskom Holdings SOC Ltd., struggled to emerge from the increasing debt arising from building a new factory. Demand for electricity has declined because Africa's most advanced economic growth has slowed and some consumers are now producing their own electricity.
Eskom said there was no certainty when the dam would be completed and needed to avoid over-reliance on external sources, the Johannesburg-based Business Day newspaper reported, citing a spokesman for the utility.
South Africa's parliamentary energy committee in November doubted the wisdom of relying on the Congo project. It is recommended that an alternative be found to replace 2,500 megawatts of off-take and then contract "if the Grand Inga project does not arrive on time."
An Energy Department spokesman and minister Radebe said they could not immediately comment.
The partnership of Chinese and Spanish companies invited by Congo to participate in developing this project includes the China Three Gorges Corp. and State Grid International Development Ltd., and AEE Power Holdings SL based in Madrid. The company submitted their joint offer in November.
South Africa increased its off-take to 5,000 megawatts, which would be "critical" to realize Inga 3 ambitions, according to a presentation they gave to the African Development Bank in July. Even in the most optimistic predictions, the factory will not be fully operational until the end of the 2020s, according to the timeline included in the company's offer.
Completing the agreement for 5,000 megawatts will be subject to conditions including South Africa securing buyers for some of this electricity from within South African Power Pool before the end of this year, according to Radebe. SAPP is an initiative between regional electric utilities that seeks to improve access to power.
The cabinet agreement needed for the agreement is expected at the end of the first quarter, Radebe said.
The tariff should not be more than $ 30 per megawatt-hour, which does not include transmission costs, according to the letter. Electric lines need to reach several borders to reach South Africa around 3,000 kilometers (1864 miles) away.
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