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Eskom is increasing its imports and has approved another major pumped storage project, but the medium-term supply situation remains very tight – and the prospects of drawing in new investment are not helped by the failure of the government’s planned independent power project.

Global Energy is planning to plant castor as the first stage of a project to produce non-edible oil for the biodiesel industry. The Mozambique government has signed an agreement with Oilmoz to build a 350,000 b/d oil refinery. Sasol has selected Foster Wheeler South Africa to carry out a pre-feasibility study for the proposed Project Mafutha coal-to-liquids (CTL) facility .

The International Finance Corporation announced on 17 March that it signed agreements for projects in South Africa and India that will make first use of its carbon delivery guarantee.

Long project lead-ins and an increasingly cumbersome registration and assessment system have severely limited the volume of carbon emission reduction credits generated by African companies, according to a leading market player.

Rio Tinto Alcan, key investor in the Coega industrial zone, is rethinking its timetable in the light of South Africa’s power crisis. But private power provider IPSA Group is confident it can meet its needs.

Greater Sekhukhune District Municipality (GSDM) in north-eastern South Africa has received approval to proceed with a multi-million dollar hydroelectric project in Limpopo Province following approval of an environmental impact assessment.

BOTSWANA: BPC seeks alternatives to Eskom supply; EGYPT: Lahmeyer gets consultancy order for Assiut HPP; ETHIOPIA: Gilgel Gibe 3 turbines out to bid; MOROCCO: EOIs sought for Abdelmoumen STEP; NIGERIA: Aqua Energy to build BOT hydro in Kano; SOUTH AFRICA: ABB wins $21m Eskom order

Currency volatility is adding to concerns about the economy’s ability to weather the power supply crisis, according to bankers canvassed by African Energy (AE 133/24, 132/1)

Eskom was a key beneficiary of the flurry of contracts whose announcement accompanied President Nicolas Sarkozy’s state visit in February.

Zambia Electricity Supply Company (Zesco) has opened talks with international financial institutions including the World Bank, the African Development Bank and export credit agencies to raise an initial $600m to build and upgrade hydropower plants, including the 750MW Kafue Gorge Lower project.

The power-sharing agreement between President Mwai Kibaki and his new Prime Minister Raila Odinga has been near universally applauded as a solution to the country’s post-election problems and is seen as the key to unblocking finance and projects (AE 132/20, 131/21, 130/1).

If pessimists are right, it may come to be seen as a balmy period when the strong macroeconomic figures registered by a majority of economies, and the upturn in investor interest from fixed income assets to downstream hydrocarbons mega-projects, suggested that economic positives could now outweigh the perennial political risk factors when assessing African business – the trend recorded by African Energy in 2006-07 (AE 129/22, 120/1).

Markets are warming to coal and other investments that can contribute to resolving southern Africa’s power crisis.

South Africa’s biggest engineering and construction group was widely expected to present strong H2 2007 results to the Johannesburg Stock Exchange on 27 February, with diluted headline earnings per share (HEPS) expected to show an increase of 50%-60% over the 135 cents recorded in H2 2006; full-year HEPS (to 30 June 2008) was also expected to grow by 50%-60%.

Eskom has invited proposals from private investors to develop up to 3,000MW of new power generation capacity by June 2012. The beleaguered utility said that the new capacity was required to help meet growing demand until the commissioning of its Medupi and Bravo coal-fired plants, as well as a planned nuclear reactor, which are expected to enter service between 2013 and 2017 (AE 132/1).