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Southern African Power Pool 2011 annual report

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Southern African Power Pool 2011 annual report Southern African Power Pool 2011 annual report Document Transcript

  • Southern African Power Pool 2011 Annual Report
  • CONTENTS Vision and Objectives 2 Organogram and Members 3 About SAPP 4 Highlights 5 SAPP Executive Committee 6 Executive Committee Chairman's Report 7 Management Committee Report 9 Planning Sub-Committee Report 11 Operating Sub-Committee Report 14 Markets Sub-Committee Report 20 Environmental Sub-Committee Report 26 SAPP Coordination Centre Report 30 SAPP Statistics 36 SAPP Statistics and Forecasts 39 Financial Statements 41 Report of Independent Auditors 43 Statement of Income and Expenditure 44 Statement of Financial Position 45 Statement of Changes in Shareholders' Funds 46 Statement of Cash Flows 47 Notes to the Financial Statements 48 The SAPP Grid 2011 68 1
  • VISIONS AND OBJECTIVES VISION development priorities. • Facilitate the development of a competitive electricity market in the SADC region. • Give the end user a choice of electricity supplier. • Ensure that the southern African region is the region of choice for investment by energy intensive users. • Ensure sustainable energy developments through sound economic, environmental and social practices. MISSION OBJECTIVES To be the most preferred region for investment for value for money by energy intensive users. • Provide a forum for the development of a world class, robust, safe, efficient, reliable and stable interconnected electrical system in the southern African region. • Coordinate and enforce common regional standards of quality of supply, measurement and monitoring of systems performance. • Harmonise relationships between member utilities. Aim to provide the least cost, environmentally friendly and affordable energy and increase accessibility to rural communities. STRATEGY VALUES • Respect for others and develop mutual trust. • Honesty, complete fairness and integrity in dealing with issues. • Selfless discharge of duties. • Full accountability to the organisation and its • Facilitate the development of regional expertise stakeholders. • Encourage openness and objectivity. through training programmes and research. • Increase power accessibility in rural communities. • Implement strategies in support of sustainable 2
  • ORGANOGRAM AND MEMBERS Organogram SADC Directorate of Infrastructure and Services Executive Committee Management Committee Environmental Sub-Committee Markets Sub-Committee Coordination Centre Board Planning Sub-Committee Operating Sub-Committee Coordination Centre SAPP Membership Full Name of Utility Status Abbreviation Country Botswana Power Corporation OP BPC Botswana Electricidade de Mocambique OP EDM Mozambique Electricity Supply Corporation of Malawi NP ESCOM Malawi Empresa Nacional de Electricidade NP ENE Angola ESKOM OP Eskom South Africa Lesotho Electricity Corporation Electricity Company OP LEC Lesotho NAMPOWER OP NamPower Namibia Societe Nationale d’Electricite OP SNEL DRC Swaziland Electricity Company OP SEC Swaziland Tanzania Electricity Supply Company Ltd NP TANESCO Tanzania ZESCO Limited OP ZESCO Zambia Copperbelt Energy Cooperation ITC CEC Zambia Zimbabwe Electricity ZESA HOLDINGS Supply Authority OP ZESA Zimbabwe OP = Operating Member NP = Non-Operating Member ITC = Independent Transmission Company 3
  • ABOUT SAPP • The SAPP was created in August 1995 at the SADC • The SAPP established the Short-Term Energy Marsummit held in Kempton Park, South Africa, when ket in April 2001. From January 2004, the SAPP member governments of SADC (excluding Mauristarted the development of a competitive electricity tius) signed an Inter-Governmental Memorandum market for the SADC region. The new market is in of Understanding for the formation of an electricform of a day-ahead market (DAM) and this was ofity power pool in the region under the name of the ficial opened in December 2009. Southern African Power Pool. The ministers responsible for energy in the SADC region signed the Revised Inter-Governmental Memorandum of Understanding on 23rd February 2006. • The SAPP is governed by four agreements: the Inter-Governmental Memorandum of Understanding which enabled the establishment of SAPP; the Inter-Utility Memorandum of Understanding, which established SAPP’s basic management and operating principles; the Agreement Between Operating Members which established the specific rules of operation and pricing; and the Operating Guidelines, which provide standards and operating guidelines. The SAPP Agreement Between Operating Members and the Operating Guidelines are under review. • The SAPP has twelve member countries represented by their respective electric power utilities organised through SADC. • The SAPP has four working committees: the Environmental Sub-Committee, the Markets SubCommittee, the Operating Sub-Committee and the Planning Sub-Committee under a Management Committee which in turn reports to the Executive Committee. The Markets Sub-Committee is a new sub-committee that was created in April 2007 following the signing of the Revised Inter-Utility Memorandum of Understanding by the SAPP Executive Committee on 25th April 2007. Also created in April 2007 is the Coordination Centre Board to govern the activities of the SAPP Coordination Centre. • The SAPP coordinate the planning and operation of the electric power system among member utilities. • The SAPP provide a forum for regional solutions to electric energy problems. 4
  • HIGHLIGHTS HIGHLIGHTS 5. Implementation of a Competitive Market The main achievements for the period under review The SAPP day-ahead market (DAM) was successfully were as follows: launched for live trading on 15 December 2009. Eight participants have signed the participation agreements 1. Growth in electricity demand to trade on the DAM. Trading volumes are increasing on a monthly basis when there are no transmission On average, the electricity demand grew by 3% constraints. per year. The weighted average sales growth was 2.1 %.The 2010 peak demand for the total SAPP 6. SAPP Membership was 45,721 MW. Taking into account the reserve requirement the capacity required is 50,385 MW During the year under review, The Copperbelt Energy against an available capacity of 49,777 MW. This gives Corporation (CEC) of Zambia was admitted as a a shortfall of 608 MW. The region will have sufficient member of SAPP under the category of Independent generation reserves by the year 2014 when projects Transmission Company (ITC). under consideration are completed. 7. Technical performance 2. Generation Capacity Expansion System disturbances reduced during the year, and no There were major capacity expansion achievements incidents were attributed to power swings or unknown during the year up to December 2010. Capacity events. equivalent to 1,100 MW was commissioned in 2010 in Angola (60MW), Botswana (70 MW), DRC (160 8. Challenges MW), South Africa (640MW) and Zimbabwe (180 MW) from rehabilitation and new projects. • Electricity tariffs are not yet at the desired levels in some countries 3. Demand Side Management • Losses of equipment due to vandalism of electricity infrastructure in most countries. Utilities have implemented load management and • Lack of adequate funding for investments demand side management strategies to keep the • Large debtor days by most utilities lights on. Eskom of South Africa did not have any • Measurement and verification of energy savings load shedding in 2010 due to these measures. Up to from demand side management programs is lacking. 750 MW have been realised in savings in 2010 by implementing the Compact Fluorescent Lamp (CFL) exchange program. Energy efficiency measures were promoted in all countries. 4. Successful hosting of the FIFA 2010 Soccer World Cup South Africa successfully hosted the FIFA 2010 Soccer World Cup between 10 June and 11 July 2010. The region’s readiness to support Eskom was demonstrated after SAPP utilities had signed the pledge to support Eskom during the period of the World Cup if emergencies arose. There were no power related incidences during the World Cup. This demonstrated the high level of reliability of supply within the region. 5
  • SAPP EXECUTIVE COMMITTEE Mr. Jacob Raleru BPC Mr. Arthur Mandambwe ESCOM Mr. Fernando Barros ENE Mr. Brian Dames Eskom Mr.v Francis Hloaele LEC Mr. Paulinus Shilamba NamPower Mr. Yengu Mussampu SNEL Mr. Pius Gumbi SEC Mr. William Mhando TANESCO 6 Mr. Manuel Cuambe EDM Mr. Ernest Mupwaya ZESCO Mr. Josh Chifamba ZESA
  • EXECUTIVE COMMITTEE CHAIRMAN'S REPORT 2. Executive Committee Meetings 2.1 29th Executive Committee Meeting The 29th SAPP Executive Committee meeting were held in Blantyre, Malawi, on 15 October 2010. The meeting was officially opened by the Principal Secretary in the Ministry of Natural Resources, Energy and Environment, Mr. Randson Mwadiwa. Mr. Pius Gumbi Executive Committee Chairperson The Southern African Power Pool (SAPP) made considerable progress in the implementation of generation and transmission projects so as to secure a reliable power supply for the SADC region. 1. Power Supply 1.1 Peak demand and Available capacity SAPP Executive Committee Meeting Delegates, Blantyre, Malawi The SAPP peak demand was 45,721MW. Taking into account reserve requirement the capacity required is 50,385MW against an available capacity of 49,777MW. This gave a shortfall of 608MW during the period under consideration. The meeting discussed the progress that has been made in the implementation of short-term measures to address the power shortages in the SADC region; progress that has also been made and the challenges that are being encountered on the day-ahead market. A review of the support to Eskom of South Africa that 1.2 Financing of Cross-Border Projects provided a secure and reliable power supply to the 2010 FIFA World Cup without any interruptions was The Executive Committee made the following done. The meeting reviewed some of the measures recommendations to consider when financing cross Eskom took during the World Cup period that could border projects in the SADC region. be incorporated into the SAPP Operating Procedures. Political endorsement at Head of State Level • Institutional framework to be put in place • Project Preparatory Facility to be made available • Dependence on Power Purchase Agreements (PPAs) • to be reduced. The Executive Committee also agreed to prepare a detailed response on each of the items highlighting the background, recommendations and SAPP’s position for the SADC Ministers of Energy to consider. At the 31st SADC Energy Officials and Energy Ministers meeting that took place in Luanda, Angola, from 27 to 29 April 2010, Guidelines for regulating cross border power trading in the SADC region were presented by RERA and were adopted by the Ministers. 7
  • EXECUTIVE COMMITTEE CHAIRMAN'S REPORT 2.2 30th Executive Committee Meeting The 30th SAPP Executive Committee meeting were held in Swakopmund, Namibia, on 4 March 2011. The meeting was officially opened by the Minister of Mines and Energy, Honorable Isak Katali during the plenary session. The welcome remarks were done during the official opening session by the NamPower Managing Director Mr Paulinus Shilamba. Executive Committee Members that attended the meeting posing for a photo At this meeting, the action matrix based on the decisions of the SADC Energy Ministers was discussed and the Executive Committee drafted an annotation showing the actions taken on the issues in the action matrix for consideration at the next SADC Energy Ministers meeting. Honorable Isak Katali, Minister of Mines and Energy of Namibia, making his opening remarks 3. SAPP Membership The Lunsemfwa Hydro Power Company (LHPC) of Zambia was admitted as member of the SAPP under the category of Independent Power Producer (IPP). 4. Appointment We welcome Mr. Josh Chifamba, the new Chief Executive Officer of ZESA Holdings of Zimbabwe. 5. Acknowledgement Mr. Paulinus Shilamba, Managing Director of NamPower and Mr. Pius Gumbi, SAPP Executive Committee Chairperson I would like to take this opportunity and thank the members of the SAPP Executive Committee for the support that I have received as Chairperson of the SAPP Executive Committee during the year under consideration. Mr. Pius Gumbi Chairperson, Executive Committee 8
  • MANAGEMENT COMMITTEE REPORT 2010/11 assess the effectiveness and acceptance of the CFL program so that customers do not revert back to the use of incandescent bulbs. On Clean Development Mechanism (CDM), projects that qualify for funding include demand side management programs, transmission and distribution grids and supply side options. Mr. Timothy Lungu Management Committee Chairperson A Working Group was setup to look into the pros and cons for a regional initiative versus individual countries approach. 3. Vandalism of electricity infrastructure 1. Introduction There were no security related issues that affected the FIFA 2010 World Cup that was hosted in South Africa. It is a privilege for me to be presenting the SAPP This demonstrates that the region has the capacity to Management Committee Report. Key issues to ensure uninterrupted supplies due to security threats. highlight include the following: However challenges are still being faced on the issue • Implementation of the demand side management of vandalism. Most utilities in SAPP are facing the programs especially the compact fluorescent lamp challenge of vandalism. It can be highlighted that programme and the savings realised Zambia and Zimbabwe have instituted laws to deal • Continued review of SAPP membership applications with vandalism that are punitive. In Zimbabwe for • Completion of credit rating exercise for selected each vandalised equipment, one can be sentenced uputilities to ten years. • Distribution of wheeling and loss revenue. • Approval of The Transmission Infrastructure A number of recommendations have been drawn up Guidelines including the following: • Preparing the Transmission Capacity Allocation methodology • The need to harmonise the region’s legal framework to ensure consistency in handling cases of vandalism In terms of the outlook, the demand and supply • The need to repatriate offenders and their subsequent situation is still tight and 1,100 MW were prosecution commissioned during the year and the demand side • The need for joint cross border operations, management programs were encouraged. networking and benchmarking visits in SAPP • The need for SAPP Members to brand their I would also like to welcome the newly elected equipment Chairperson of the Management Committee, Mr Mongezi Ntsokolo of Eskom who was elected in The above issues were presented to SADC for September 2010. endorsement. 2. Demand Side Management Initiatives 4. Financing Cross Border Projects in SADC In 2010, CFL demand reduction contribution was The Management Committee addressed the issues 650MW. It was also reported that dedicated DSM and challenges for financing cross border projects in divisions have been set up in EDM and Eskom. the SADC region. The issues fall under the following categories: Measurement and verification methods are now being developed by SAPP. A survey will be conducted to 9
  • MANAGEMENT COMMITTEE REPORT 2010/11 • Political endorsement of Projects at Head of State level vs. at Ministerial Level • Institutional framework within SADC • Project Preparatory Facility access to funding and requirements • Dependence on Power Purchase Agreements (PPAs) for projects to be anchored 6. Lunsemfwa Hydro Power Station Visit In line with the review of SAPP membership, LHPC submitted an application to join SAPP in the category of Independent Power Producer. LHPC owns 2 power stations, Lunsemfwa and Mulungushi with a total installed capacity of 46.5 MW. LHPC is upgrading units and capacity will increase to 52.5 MW in 2011. Discussions are underway on how some of these LHPC intends to develop 120 MW at Lunsemfwa barriers can be overcome. Lower by 2015/16. 5. Utility Credit Rating Exercise A Task Team was visited Lunsemfwa Hydro Power Company (LHPC) to inspect the company’s, generation With financial support from the World Bank, BPC, and transmission facilities. Recommendations were EDM, LEC and ZESCO volunteered to participate presented to the Executive Committee for a decision in a performance assessment study. Some general in March 2011 after which LHPC was admitted to the recommendations included the following: SAPP as an Independent Power Producer (IPP). 5.1 Energy Supply • Diversification of energy sources • Elaboration of strategic plans to cover future demand There is need to carry out feasibility studies and plan for a period of over 20 years. 5.2 Operating Efficiency • Losses reduction plans • High OPEX and staff costs There is need to revise and optimise processes and to implement outsourcing policies 5.3 Management Efficiency • Implementation of modern Management Information Systems 5.4 Credit Rating Exercise • Need of a specific and dedicated team • The team must have access to all the information SAPP Task Team at LHPC Power Station 7. Acknowledgement I would like to express my thanks to members of the Management Committee for the support they have given me during the year. Their invaluable support is appreciated. I also wish success to the upcoming Chairperson. The recommendations not only help for credit rating but for overall companies’ performance improvement. The utilities shall prepare a Road Map for addressing priority recommendations within their strategic plans. The credit rating exercise demonstrates the financial Mr. Timothy Lungu credibility of the utilities. Management Committee Chairperson 10
  • PLANNING SUB-COMMITTEE REPORT 2010/11 The generation projects commissioned in 2010 are shown in the table below: Ms Monica Moeko (LEC, Lesotho) Planning Sub-Committee Chairperson 1. Introduction Up to 16,932 MW is planned between 2011 and The region continues to face challenges of meeting 2015. The region will have sufficient generation demand due to the diminished generation surplus reserves after 2014 if all projects are commissioned as capacity. Progress has been made in agreeing to a planned. Generation project tracking is being done to methodology to be used for transmission losses determine the funding status of the projects. reconciliation among members. Appendix 1 shows the planned generation and In terms of technical performance the system has been renewable energy projects. quite tight due to the low levels of reserve generation capacity. The generation resource potential in the 3. Transmission Loss Reconciliation region is still quite high and needs to be exploited especially renewable energy and hydropower. The Utilities have been settling bilaterally for transmission Planning Sub Committee has initiated the SAPP Pool losses incurred due to electricity trading and wheeling Plan review process. This is intended for SAPP to have transactions. The SAPP devised a methodology for charging transmission losses from bilateral trading ownership of the Regional SAPP Pool Plan. based on the weighted average generation cost of each utility. The charges are based on the three time 2. SAPP Demand and Supply Situation periods which are peak, standard and off peak and The peak demand in SAPP increased by 4.1% are also classified by winter and summer season. The in the year under review. SAPP had an available methodology was approved and implementation is capacity of 49,777 MW against 50,385 MW which with effect from 1 April 2011. is required after taking into account reserves. This shows a shortfall of 608 MW. Utilities implemented load management strategies during 2010. Capacity equivalent to 1,100 MW was commissioned in 2010 in Angola (60MW), Botswana (70 MW), DRC (160 MW), South Africa (640MW) and Zimbabwe (180 MW) from rehabilitation and new projects. 11
  • PLANNING SUB-COMMITTEE REPORT 2010/11 project. Financial closure is expected in 2012 and commissioning in 2017/18. The transmission project commissioning will be linked with the generation projects development in Mozambique. 5. Technical Issues 5.1 Generation Planning Criteria SAPP daily load profile 4. Transmission Interconnector Projects The SAPP Generation Planning Criteria was developed during the period under review and is still to be adopted. 5.2 Renewable Energy Integration 4.1 Zimbabwe - Zambia – Botswana –Namibia Most of the utilities are reporting on progress in Interconnector (ZIZABONA) implementing renewable energy projects. Through The four power utilities from Zimbabwe, Zambia, government policies in various countries consideration Botswana and Namibia agreed on a project concept is being given to renewable energy. to develop a high voltage transmission infrastructure 5.3 Load Diversity in SAPP network linking the four countries. A consultant was appointed in November 2010 for financial, legal, technical and market studies. EPC Contractor bidding selection and project documentation are to be done including packaging the project to bankability. A decision is to be made as to whether to carry out the project in one or two phases. Recommendations will also be made on the project structure. The assignment for the consultant will take 12 months. 4.2 Zambia – Tanzania – Kenya Interconnector The project aims to interconnect Tanzania to the SAPP Grid. A transaction advisor has been appointed. The project is being handled by the Office of Promoting Private Investments (OPPI) in Zambia. 4.3 Mozambique Transmission Backborne Project The HVDC / AC line route has been determined. Techno-economic feasibility studies were completed in July 2010. Appointment of legal advisors and agreeing the financing structure is yet to be done including packaging of the project to bankability. Partners will finance development costs until financial closure with EdM of Mozambique being the lead developer for the 12 The Generation Planning Working Group has been monitoring the coincidence of the system peaks within SAPP. It was noted that most of the utilities peak within the same week and within the same month especially during the winter season.
  • PLANNING SUB-COMMITTEE REPORT 2010/11 6. Meetings and Workshops 6.1 European Union Capacity Building Programme reliability was also discussed. The power transfer limits for 2011 were updated. The 5th workshop under the SAPP EU capacity building programme took place in Johannesburg, South Africa from 14 to 16 April 2010. The workshop target members of the SAPP Planning Sub-Committee and focused on transmission system planning. All the workshops were facilitated by SOFRECO of France. Some members of the TPWG at the meeting 7. Acknowledgements I would like to take this opportunity to thank members of the SAPP Planning Sub-Committee for supporting me during my tenure. Some of the participants at the 5th workshop on Transmission Planning Ms. Monica Moeko Planning Sub Committee Chairperson 6.2 Concentrated Solar Thermal (CST) Workshop Mr Alison Chikova, the SAPP Chief Engineer attended a workshop sponsored by the World Bank on Concentrated Solar Thermal Power held in Gaborone. Botswana. The workshop was officially opened by Honourable Minister of Minerals, Energy and Water Resources, Dr P H.K Kedikilwe. The workshop addressed regulatory frameworks for CST promotion, financing of CST plants, supply chain opportunities and challenges and experiences for the industries’ point of view. The potential for CST in the region is huge. 6.3 Transmission Activities Planning Working Group The SAPP Transmission Planning Working Group (TPWG) met in Harare from 1-2 December 2010. Among other things, they discussed the upcoming tranmission projects and their impact on the SAPP operations. The penetration of renewable energy projects on the SAPP grid and their impact on system 13
  • OPERATING SUB-COMMITTE REPORT Operating Sub-Committees at a meeting held in Harare, Zimbabwe, in April 2010. 3. Quality of Supply Mr. Adriano Jonas EDM (Mozambique) Operating Sub-Committee Chairperson At the 34th SAPP Meetings held in Gaborone, Botswana, from 15 to 16 February 2010, the Operating Sub-Committee agreed to revive the SAPP Quality of Supply (QOS) Working Group. Terms of reference for the working group were developed. The working group met for the second time from 11 to 12 November 2010 at Eskom Academy of Learning in Johannesburg, Republic of South Africa. The following were major outputs from the meeting: • The SAPP Quality of Supply Standard was finalised. • The SAPP QOS Meter Specification was finalised. • Points to install QOS facilities in the SAPP were identified. 1. System Demand Situation 4. SAPP SCADA System Project Due to power supply and other constraints, loadshedding programmes of varying magnitude were implemented in SAPP utilities especially during peak periods. In the year under review (2010/2011), the peak demand in the SAPP interconnected system was 43,664MW and that for Eskom, South Africa, was 36,970MW. Compared to the previous year, the SAPP interconnected system demand and the Eskom system demand were higher by 176MW and 265MW, respectively. The minimal growth in demand was attributed to various load management activities that were implemented during peak periods. Refer to the statistics section of this report for further details of system demand. The SAPP SCADA project kicked off in June 2010 following the award of a contract to ACTOM to supply, install and commission the Areva SCADA system at the SAPP Coordination Centre. The project equipment was delivered from France to Pretoria, South Africa, in December 2010 for hardware and software configuration. In January 2011, two personnel from SAPP Coordination Centre were attached to the contractor in Pretoria to participate in the configuration. From 16 February to 16 March 2011, a comprehensive maintenance and operations training course for the Areva SCADA System was organised for the SAPP in Massey, France. 2. Inter-Control Area Interchange Energy The SAPP Coordination Centre kept the account for the inter-Control Area interchange energy. InterControl Area inadvertent energy, imbalance energy and emergency energy were being reconciled monthly by all Control Areas. The SAPP Coordination Centre was generating monthly formal requests for financial settlement of imbalance energy or pay back in kind of inadvertent energy by Control Areas. Inadvertent energy and imbalance energy were being classified and summarised on monthly basis using a methodology based on hourly average values of power system frequency. The methodology and applicable energy rates were agreed jointly by the Markets and 14 Trainees and Trainers during the SAPP SCADA Project training in Massey, France
  • OPERATING SUB-COMMITTE REPORT Delegates from SAPP Coordination Centre, SEC (Swaziland), ZESA (Zimbabwe) and ZESCO (Zambia) participated in the training. In the first phase, the SAPP SCADA system will obtain data from the existing SCADA systems of the three Control Areas (Eskom, ZESA and ZESCO) via the ICCP (Inter-Control Centre Protocol) telecommunication channels. One of the objectives of the project is to facilitate efficient monitoring of the SAPP interconnected power grid. 5. The Telecommunications Working Group (TWG) The Telecommunications Working Group (TWG) is one of the working groups reporting to the Operating Sub-Committee. The TWG met in Mbabane, Swaziland, from 29 to 30 April 2010. The TWG resolved that optic fibre network should be the backbone of SAPP telecommunications link. The TWG identified a few gaps in the optic fibre network. The TWG estimated costs for linking the gaps and made proposals for implementation. The TWG is also the implementing organ of the SAPP SCADA project. On 7 December 2010, the TWG and ACTOM (supplier of the SAPP SCADA system) met in Pretoria, Republic of South Africa. At this meeting, the status of the SAPP SCADA Project was reviewed. Further, clarifications were made by SAPP and ACTOM on various key issues in the implementation of the project. 2010 for live testing and commissioning. However, the link was inaugurated on 12 November 2010 at Katima Mulilo in Namibia by the four Heads of State and Government of Botswana, Namibia, Zambia and Zimbabwe. The link provides an alternative asynchronous path for power interchange between SAPP members in the south and in the north, thereby easing congestion in the central corridor via Zimbabwe and Botswana. The 950km link is between the existing 220kV AC system at Gerus Substation in Central Namibia and the existing 220kV AC system at Zambezi Substation in the Caprivi Strip in Namibia, connected to Livingstone Substation in Zambia at the same voltage. The first phase monopole HVDC scheme has a capacity of 300MW but was limited to 50MW for commissioning and initial commercial operation between NamPower of Namibia and ZESCO of Zambia from October 2010. The link was not yet available for SAPP power wheeling in the year 2010. Zambezi Converter Station under construction on the Caprivi Strip in Namibia 7. System Disturbances 7.1 General Outlook Some members of TWG and officials from ACTOM at a meeting in Pretoria Refer to figure below for a general outlook of SAPP system disturbances. Main causes of the system disturbances were: adverse weather conditions especially in the rainy season, power oscillations, and isolated events of equipment vandalism and equipment failure. Refer to Appendix 1 for a summary of some major system disturbances reported on the SAPP grid. 6. The Caprivi HVDC Link The 350kV Caprivi HVDC Link was energised in May 15
  • OPERATING SUB-COMMITTE REPORT flows on transmission paths and on handling power belonging to a member but residing in a different country. The meeting also signed off the criteria for prioritizing transmission capacity where constraints and competing transactions prevail. 10. Acknowledgements Reported SAPP System Disturbances 7.2 Mitigation Measures In the year 2010/2011, power demand continued to rise in the SAPP power system against a condition of power deficit. Remarkable interchange energy imbalances were reported on the interconnectors. Also, system disturbances of varying magnitude and impact were experienced. I would like to thank all Operating Sub-Committee members who assisted me in various ways in meeting the challenges. Operating Members carried out recommended activities to mitigate occurrence and impact of system disturbances. These included enhancing information sharing by system controllers in real time, strict adherence to power transfer limits, returning to Mr. Adriano Jonas service generating units at a major power station in Operating Sub-Committee Chairperson Zimbabwe, re-tuning power system stabilisers on key generating units, and returning to service key Static Var Compensators (SVCs). 8. Revision of the SAPP Operating Guidelines After completing revision of the Inter-Utility Memorandum of Understanding (IUMOU), Agreement Between Operating Members (ABOM), the SAPP is now in the process of revising the Operating Guidelines (OG). The Operating SubCommittee formed a Task Team comprised of all SAPP members to carry out the revision. The Task Team met in November 2010 in Lusaka, Zambia. At the meeting, a consultant, PPA Energy, made a presentation on power system frequency bias and control performance standards in interconnected power systems. This assisted the Task Team in revising some guidelines and also developing other guidelines. 9. Joint Markets and Operating Sub-Committees Meeting The Joint Markets Sub-Committee (MSC) and Operating Sub-Committee (OSC) meeting on power wheeling was held at SAPP Coordination centre in Harare, Zimbabwe, on 28 March 2011. The meeting made resolutions on handling of counter power 16 Power line and substation in NamPower (Namibia)
  • OPERATING SUB-COMMITTE REPORT Date Utility Detail of disturbance Saturday 17-Apr-10 14h34 HCB At 14h34 on Saturday 17 April 2010, the generator unit assigned to the HVAC load (Mozambique) / at HCB Songo Power Station tripped. On the HCB-ZESA interconnector, 197MW ZESA (Zimbabwe) ZESA imports reversed to 86MW ZESA export. About two (2) minutes later, the 330kV HCB-ZESA interconnection tripped on three-phase main distance protection. Although energy interchange schedules were temporarily affected by the disturbance, no load was lost in the ZESA system. Prior to the disturbance, the 330kV HavenBulawayo and Hwange-Sherwood 1 lines were out of service for voltage control in ZESA. The HCB-ZESA interconnection was returned to service at 16h30 after the first attempt at 16h09 resulted in the feeder tripping at both ends upon closure. Sunday 02-May-10 10h18 ZESA (Zimbabwe) At 10h18 on Sunday 02 May 2010 the 330kV Insukamini – Bulawayo and Haven - Bulawayo lines in ZESA tripped on three-phase main distance protection due to suspected power swings induced by load rejection from the HVDC system. 330kV Insukamini – Hwange and Hwange-Sherwood 2 lines were out of service for planned maintenance and voltage control, respectively, prior to the disturbance. The SAPP interconnected power system was split. In the northern island, system frequency was observed momentarily dipping to 49.30Hz and rising to 51.00Hz. ZESA’s Insukamini load of about 89MW remained connected to the Eskom system. Energy interchange schedules on ZESA-ZESCO, HCB-ZESA and ZESA-BPC-Eskom were affected. The interconnected system was re-synchronised on the same day at 12h07. Wednesday 05-May-10 11h43 Wednesday 05-May-10 16h15 Friday 21-May-10 17h58 Eskom (South Africa) At 11h43 on 05 May 2010 Unit 3 at Matla Power Station generating 430MW tripped. A minute later, Unit 5 at Duvha Power Station generating 450MW tripped. At 11h47 Unit 3 at Matla Power Station generating 375MW tripped. The protection that operated was ‘reverse power’. Malta units tripped because of loss of condenser vacuum resulting from low level of cooling water well. The Duvha unit tripped because of low bunker levels. Power system frequency momentarily dropped to 49.60Hz and then stabilised at 49.75Hz. At Songo Power Station, the bus-coupler circuit breaker linking the HVDC and HVAC loads tripped on under-frequency protection. An output of about 220MW was lost from Apollo Converter Station. A 230MW reversal of power interchange flow was observed on the 400kV Matimba – Phokoje (Eskom-BPC) tie line. On the 330kV Songo-Bindura interconnector load increased from 185MW to 256MW. Later, output from Apollo Converter Station was restored to normal at 11h51. Matla Unit 6, Duvha Unit 5, and Matla Unit 5 were back on load same day at 13h08, 15h20 and 16h11, respectively. ZESA (Zimbabwe) At 16h15 on Wednesday 05 May 2010 330kV Sherwood – Chertsey line tripped on main distance protection due to suspected power swings induced from networks external to ZESA. 330kV Haven – Bulawayo and Hwange-Sherwood 1&2 lines were out of service for voltage control prior to the disturbance. The interconnected power system was split. A condition of over-frequency was observed in the northern island. Kariba South Unit 5 tripped on over-frequency. ZESA’s Insukamini, Bulawayo, Chertsey and Tokwe loads totalling about 250MW remained connected to the Eskom system. Energy interchange schedules on ZESA-ZESCO, HCB-ZESA and ZESA-BPCEskom were affected. The interconnected system was re-synchronised on the same day at 17h48. Eskom (South Africa) / LEC (Lesotho) Merapi 180MVA 275/132kV transformer 1 tripped due to a faulty transformer tap changer. While this transformer was still out of service, the other transformer in parallel, the Merapi 180MVA 275/132kV transformer 2, also tripped on 17 June 2010 at 08h25. The supply to LEC was interrupted but some loads were then restored through the 88kV network. Merapi 180MVA 275/132kV transformer 1 was returned to service at 20h01 on 17 June 2010 while Merapi 275/132kV transformer 2 tap changer was being repaired. 17
  • OPERATING SUB-COMMITTE REPORT Date Utility Detail of disturbance Friday 18-Jun-10 10h09 ZESCO (Zambia) / At 10h09 on Friday 18 June 2010, the following 330kV transmission lines tripped ZESA (Zimbabwe) on distance protection in the ZESCO system: Kariba North – Leopards Hill 1&2, Kafue Gorge – Leopards Hill 1&2, and Kafue West – Leopards Hill. Also, six (6) units at Kafue Gorge generating 940MW and 3 units at Kariba North Bank generating 480MW tripped. The Victoria Falls Power Station was islanded from the ZESCO grid at Muzuma Substation but remained interconnected to the Caprivi HVDC link. This system disturbance was initiated by a fault on Kariba North - Leopards Hill line number 2. Upon clearing the fault, the yellow phase interrupter chamber of the 330kV line circuit breaker at Kariba North ruptured. In the ZESA system, 330kV Kariba South – Alaska lines 1,2&3 tripped on main distance protection and Kariba South units 1 to 6 generating 734MW tripped on over-frequency. Inter-Control Area energy trading schedules were affected. At 12h07 a generator tripped at Songo and then 330kV Songo – Bindura and Selous – Norton lines tripped on over-voltage. Interconnection between ZESA and HCB and between ZESA and ZESCO were re-established at 16h18 and at 22h02, respectively. Thursday 09-Sep-10 08h17 SNEL (DR Congo) The following tripped at Kolwezi 500kV HVDC Converter Station terminal : - Synchronous condenser number 02 ; - Harmonic filter number 01 - Autotransformer 220/120 kV - 100 MVA Also, machines 1 and 2 at NSEKE power station and machines 2 and 3 at KONI power station tripped. The disturbance was caused by the tap changer failure on 51MVA 132/220kV output converter. About 60MW power inadvertently flowed into SNEL from SAPP. This was then limited by load shedding that was carried out by SNEL. The transformer tap changer was repaired and all the equipment was restored to service by 11h41 on the same day. Sunday 24-Oct-10 08h30 Eskom (South Africa) / LEC (Lesotho) The 275kV Harvard-Merapi 1 line was taken out of service for routine maintenance. About half an hour later, low voltages were experienced on the Tweespruit and Merapi 132kV networks. Then Clocolan 132/88kV transformer 2 and Tweespruit 132/88kV transformers 1&2 tripped on ‘tap-changer lock-out’ and ‘regulation abnormal’ protection. Supply to LEC was interrupted. The outage of 275kV Harvard-Merapi 1 line was then cancelled and the line was returned to service at 08h55. Tweespruit and Clocolan transformers were returned to service at 09h51 and 11h05, respectively. Tuesday 26-Oct-10 15h28 ZESA (Zimbabwe) The 750MVA 400/330kV Insukamini Transformer T3 tripped on 11kV neutral displacement protection due to inadvertent opening of the 11kV tertiary blue phase D-link. The SAPP System split and about 109MW interchange (ZESA-NamPower and ZESCO-Eskom) was temporarily interrupted. The transformer was returned to service at 21h15 after checks and tests; and the interconnection was re-synchronised at 21h30 and normal power interchange resumed. Wednesday 03-Nov-10 15h54 ZESA (Zimbabwe) The 330kV Dema-Bindura line faulted on all 3 phases, tripped and locked out. The 330kV Songo-Bindura line then followed to trip on over-frequency. The SAPP system split and 257MW imports for ZESA/Eskom/BPC curtailed. The cause of the fault was a collapsed vandalised tower and conductors were on the ground. The two lines remained out of service. HCB/EDM-North were isolated on the AC interconnection for a week until the tower was repaired. Tuesday 09-Nov-10 13h29 18 BPC /Eskom/ ZESA At 13h29 132kV Dwaalboom - Spitskop line 1 tripped. At 13:30 400kV Matimba Phokoje line tripped. Same time 400kV Phokoje-Insukamini line inter-tripped. The trips were due to lightning activities. BPC load of about 400MW was connected to only two 132kV lines and while manual load-shedding was being carried out, one of the two lines (132kV Dwaalboom-Spitskop line 2) also tripped at 13h42. Two generators tripped at Morupule on overload. In restoration, the Eskom-BPC 132kV lines were returned to service by 14h03. The 220kV Bulawayo - Francis Town line was put in service to supply the northern island in BPC. The Phokoje 400kV supplies were re-established at 06h41 on the following day and load restoration commenced immediately. The 400kV Insukamini – Phokoje interconnector was re-synchronized at 08h14 on the 10 November 2010.
  • OPERATING SUB-COMMITTE REPORT Date Utility Wednesday 15-Dec-10 11h52 HCB (Mozambique) At 11h52:32 HVDC Converter Bridge 4 tripped at Apollo. Then at 11h54:30 one bridge tripped at Songo. At 11h54:38, load rejection control signal (60% of 720MW during 528ms) was received at Songo leading to tripping of bus coupler on ‘excess energy’ protection. Due to low HVAC load, Songo was operating with 4 units on DC bus bar, feeding the AC bus bar via bus-coupler. After bus-coupler trip, Songo-Bindura and EDM-N lines did not trip. So EDM-N imported up to 108MW from the SAPP AC network. Bus-coupler was closed at 11h56:50 and the scheduled transactions via Songo-Bindura line were normalised at 12h01:18. Monday 03-Jan-11 13h48 BPC (Botswana) / HCB (Mozambique)/ ZESA (Zimbabwe) The 400kV Insukamini-Phokoje interconnector tripped on distance protection blue and yellow phases zone A&B due to suspected lightning activity. This was followed by tripping of 220kV bus coupler breaker at Songo on ‘max angle deviation exceeded’ protection. (Angle measured between Apollo HVAC bus bar and Songo HVAC bus bar increased from 39º to 146º). Impedance variation on the HVAC link was observed by the controller (GMPC) at Songo. No load was lost in ZESA. Interconnection was re-established at 14H05 at Insukamini. And, bus-coupler was closed at 14h12:08 at Songo. Saturday 28-Jan-11 06H23 HCB (Mozambique)/ Eskom (South Africa) Apollo Converter Station lost an output of about 1550MW due to loss of five generating units at HCB Songo Power Station. Power system frequency dropped from 50.05Hz to 49.4Hz at worst point then stabilised at 49.89Hz. To arrest frequency decay, from 06H24 to 06H42 the following generating units auto-started in Eskom: Port Rex 1, 2 &3, Acacia 1,2 &3; also Palmient unit 2 shutdown from pump mode; further, Hillside Potline 2 load of about 440MW was load shed. About 150MW inadvertently and temporarily flowed into Eskom on the Eskom-ZESA tie-line. Sunday 29-Jan-11 23H00 Detail of disturbance ZESA (Zimbabwe) Due to power swings, the 330kV Chertsey-Sherwood and Hwange-Sherwood 1 lines tripped on distance protection (back-up) and generators 2 & 4 at Hwange on sensitive power protection and generator 5 at Kariba South on over-frequency. 330kV HavenBulawayo and Hwange-Insukamini lines were out of service. The SAPP system was split into two islands. ZESA did not lose any load but about 250MW of its load was temporarily fed from Eskom. The SAPP system synchronism was re-established at 00h53 on 30Jan11. 19
  • MARKETS SUB-COMMITTE REPORT 2. DAM Participation Levels Mr Adérito Sousa EDM (Mozambique) Markets Sub Committee Chairperson 1. Introduction. It gives me great pleasure as a newly elected Markets Sub Committee Chairperson, to report on the SAPP market activities for the year ended 31st March 2011 and in particular the developments on the newly launched SAPP competitive Day Ahead Market (DAM). In the past two years we have been concentrating our efforts on communicating the SAPP DAM market benefits and differentiation to enable all stakeholders and potential investors to understand our market and the underlying methodology. We have also been working on the issues that needed to be resolved prior to market opening. This message was well received as evidenced by the live operation of the SAPP DAM as from the 15th of December 2009. Since then members have realised the benefits of the DAM as it plays a pivotal complimentary role to the traditional bilateral trading arrangements that have been characterising the SAPP trading portfolio since SAPP formation. However challenges on the DAM operation and trading in general are still there and these range from diminishing generation capacity, transmission constraints and mismatch of prices between sellers and buyers bids. It is my strong conviction that these are not insurmountable challenges and with concerted efforts as evidenced from the efforts being put by SAPP as a family and our cooperating partners such as the Government of Norway and Sida, the dream for a competitive market in the SAPP will be fully realised. 20 A total of eight members have signed the DAM governance documents as of 31st March 2011. These are Eskom, NamPower, BPC, SEC, ZESCO, EDM, ZESA and LEC. On average a total of five members have been active on the market during the period under review. Non SAPP members have also shown interest to participate in the SAPP DAM market. It should be noted that the revised SAPP governance documents have opened up participation of current non SAPP members subject to meeting the conditions to participate as prescribed in the DAM Book of Rules. No market abuse or misbehaviour was recorded on the market during the period under review. 3. DAM Market Performance Highlights 3.1 Traded Energy Volumes A total of 395.642 GWhr Sale Bids and 258.418 GWhr Buy Bids were received during the period 1st April 2010 to 31st March 2011. Out of this, a total of 27.397 GWhr was traded. A lower figure was traded when compared to bids and offers submitted to the market largely due to mismatch of prices between sellers and buyers and transmission constraints experienced on the market. There was a significant rise on the volumes on the market when compared to the 31.450 GWhr Sale Bids, 7.725 GWhr Buy Bids and 0.545 GWhr Traded energy realised in the previous year. Below is a summary of the yearly market performance in terms of energy volumes submitted and those that were actually traded.
  • MARKETS SUB-COMMITTE REPORT Fig 3.1 Total Energy Offered and Traded on DAM for the Year Ended 31st March 2011. Below is a summary of the shares of trade on the DAM and Bilateral trading platforms from the 1st of April 2010 to the 31st of March 2011. Fig 3.2 Market Share Distribution Between Bilateral and DAM Trades for the Year Ended 31st March 2011. The market achieved commendable progress although there was no market cross during the first four months of the financial year, that is, from April to July 2010. Trading however picked up in August 2010 reaching a climax in January 2011. During the period under review, market cross was largely achieved for more than 50% of the time and for an average of 20 hours in a day. It is also interesting to note that trading took place during peak, standard and off peak periods and 3.3 DAM Market Clearing Prices (MCPs) in certain days, trading occurred for all the 24 hours. There were more sale bids than buy bids for most of The average market clearing prices continued to rise with March 2011 recording the highest average at the time during the year under review. USc3.90/kWhr. Below is a summary of the average monthly MCP prices for the year ended 31st March 3.2 Market Share Distribution 2011. A total of 27.397 GWhr was traded on the DAM during Fig 3.3 Average Monthly DAM Market Clearing the period from 1st April 2010 to the 31st of March 2011 when compared to 9, 516.515 GWhr traded on Prices (MCPs) for the Year Ended 31st March 2011. the bilateral trading platform during the same period. This resulted in the average market share for DAM trades of 0.29%. 21
  • MARKETS SUB-COMMITTE REPORT The reason for the drop in average MCP prices from July 2010 to September 2010 was largely due to increased competition as more sellers entered on the market with the buy bids not increasing. However from September to March 2011, the average MCP prices were generally increasing due to increased competition for power on the market that was coupled with transmission constraints. Market clearing prices on DAM were very competitive when compared to bilateral trades for the period under review. 3.4 Revenues Realised from the DAM Market A total of USD975,855 was exchanged on the DAM market for the period from the 1st of April 2010 to the 31st of March 2011. Of this USD757,767 was exchanged between buyers and sellers of energy on the market, USD69,873 and USD 15,683 was distributed to respective Transmission System Operators (TSOs) as Wheeling and Losses revenues respectively, USD54,793 was received by the Market Operator as Administration fees and a total of USD77,739 was collected as Congestion Income, that is income arising as a result of transmission constraints. Below is a summary of the revenues realised during the year under review. Fig 3.4 DAM Revenues Realized for the Year Ended 31st March 2011. 22 MSC delegates at the 5th MSC meetings in Harare, Zimbabwe, 22nd April 2010. 4. SAPP Trading Challenges The SAPP market faced three key challenges during the period under review. These are briefly outlined below. 4.1 Power Supply Challenges Despite the fact that some SAPP members have excess generation capacity while others have generation deficits, in general, the SAPP is currently in a generation shortfall. This situation has had a tendency of encouraging bilateral trading as a means of ensuring security of supplies as opposed to relying more on the short term SAPP DAM market. As a result, there are generally very few sellers of power on the DAM during peak and standard times. Where such power is available, the prices are generally quite high. As a result this has had an impact on trading on the DAM market. This situation is likely to continue up until the SAPP has installed adequate generation capacity most likely from year 2014 provided the current generation expansion plans are implemented on schedule. One approach to increase liquidity in the DAM is to trade bilateral contracts through the DAM and implement Contract for Differences (CfDs). The SAPP has considered this approach but the fear is that there is more exposure for buyers of power when bilateral contracts are cleared through the DAM.
  • MARKETS SUB-COMMITTE REPORT 4.2 Mismatch Between Buyers and Sellers Bid prices One of the main challenge why trading has been relatively low on the DAM market when compared to bids submitted, has been the mismatch between buyers and sellers ask prices. The sellers are offering prices that buyers are apparently not prepared to pay. As a result there is no matching for most of the time. This challenge can only be overcome if traders exercise economic dispatch and optimization of their entire supply and demand portfolios as opposed to taking advantage of the current generation shortfall in the SAPP when pricing bids. For that to happen, there is need for adequate confidence of getting power on the DAM market. 4.3 Transmission Constraints Transmission constraints, especially along the SAPP central corridor, have had significant impact on both bilateral and DAM trading during the period under review. On some corridors, existing contracts are more than double available transmission capacities. Transmission constraints on the SAPP grid can also be witnessed by the significant difference between matched and actual traded DAM volumes as given in Fig 4.1 below. Fig 4.1 Impact of Transmission Constraints on DAM Trading for the Year Ended 31st March 2011. It can be noted from Fig 4.1 above that for the year under review, a total of 44,408 MWhr was matched but only 27,397 MWhr was actually traded. As a result, a total of 17,011 MWhr or 38.3% of what was matched could not be traded due to transmission constraints. 5. Transmission Capacity Access & Allocation The Markets and Operating Sub Committees developed criteria for allocating transmission capacity in the SAPP. The criteria promotes the principle of open access to transmission facilities in the SAPP at the same time allowing the transmission developers first right to access of their transmission facilities. The criteria are also built on the principle of the Grandfather’s Rule where old contracts have preference over newer contracts. In addition it also recognises the need to support one another during emergencies. 6. Market Guidelines Development The Markets Sub Committee established a Task Team to develop Market Guidelines for SAPP. The MSC Task Team on Market Guidelines held their first meeting in November 2010 in Lusaka, Zambia. A lot of progress was made and recommendations have been made for MSC consideration. The Guidelines will embrace all the trading platforms in the SAPP and are designed to ensure co-ordinated trading among SAPP Members, efficient use of shared facilities and to achieve high levels of system reliability of the interconnected SAPP system. The Guidelines specify how each of the identified SAPP markets shall be developed, operated and managed. So far, guidelines for Bilateral trading, 23
  • MARKETS SUB-COMMITTE REPORT Over the Counter (OTC) trading and the Day Ahead Market trading platforms have been completed. 7. Market Surveillance In order to ensure fair play among market participants, there is need for market surveillance. As such, the SAPP has agreed to establish a Markets Monitoring & Surveillance Team (MMST) that will oversee the market surveillance portfolio in the SAPP. The Terms of Reference for the team were developed and the full operation of the team will await market performance. Meanwhile the Coordination Centre Manager is responsible for the market surveillance functions. 8. Capacity Building Operating a competitive market requires continuous capacity building of the SAPP members and in particular the Markets Sub Committee that is expected to spearhead the development of all the possible market trading portfolios in the SAPP. The development and operation of a competitive market comes with a number of challenges and for SAPP, this is not an exception. The SAPP is currently transforming from a cooperative pool to a competitive power pool. Such transitions require a lot of capacity building among the SAPP members. During the period under review, the SAPP managed to undergo a number of capacity building activities that were very useful in the implementation and operation of the DAM market. Below are some of the training activities that were undertaken. 8.1 Study Tour to Europe The SAPP undertook a study tour to Europe on electricity power markets development and implementation on 20-30 July 2010 as part of the European Union funded Capacity Building Programme for SAPP. The study tour was an eye opener to members and the immediate results were increased volumes of trade for the period August 2010 to date. 24 Delegates who attended the Study Tour in Europe in July 2010. 8.2 Country Seminars The Government of Norway and Sida provided funding for country seminars on DAM trading. Provision was made to hold country seminars in each of the SAPP members. The main purpose of the seminars is to share on opportunities and challenges (regulatory, policy and technical issues) that may be encountered by the region as it implements the competitive electricity market. One seminar for all SAPP members, respective SADC ministries of energy, RERA, large consumers and Independent Power Producers was held in August 2009. During the period under review only one country seminar was held for South Africa. The seminar was attended by SAPP CC, RERA, Eskom, NERSA, DoE in SA, IPPs, Large User groups etc. 9. Traders and Operators Forum The 7th session of the SAPP Traders and Operators forum was held in Maseru, Lesotho from the 20th to the 21st of October 2010. Forty participants from twelve members shared hands on challenges and experiences on operational issues and market developments.
  • MARKETS SUB-COMMITTE REPORT Participants at the 7th Session of the Traders and Operators Forum – Maseru, Lesotho. 10. Acknowledgements I would like to express my gratitude to the first and outgoing Markets Sub Committee (MSC) Chairperson, Mr Michael Barry of Eskom (South Africa) for his sterling effort to address all the outstanding issues and ensure that the market is opened for live trading on the 15th of December 2009. I would also like to pay special tribute to our cooperating partners and in particular, the Government of Norway, Sida, the European Union etc whose continued commitment and support towards the implementation of the SAPP competitive market is very much appreciated. The members of the Markets Sub Committee (MSC) have also been very supportive and their efforts can be witnessed by the number of issues they resolved for the good of the market. The SAPP CC team headed by the Centre Manager, Dr Lawrence Musaba, also worked tirelessly to ensure the success of the trading arrangements in the SAPP. Market participants and their respective traders and system controllers have been very supportive and their continued participation immensely contributed towards the success of the market during the period under review. Mr. Adérito Sousa Markets Sub Committee Chairperson. 25
  • ENVIRONMENTAL SUB-COMMITTEE (ESC) ANNUAL REPORT Environmental and Social Impact Assessment have been approved on the Mozambique side, while Malawi is yet to decide on the future of the project. 2.4 Zambia-Tanzania-Kenya Interconnector The Environmental and Social Impact Assessment report has been completed and approved on the Zambian side. On the Tanzanian side, the situation is as follows; Mrs. Matseliso Moremoholo LEC (Lesotho) Environmental Sub-Committee Chairperson 1. Introduction The SAPP continues to provide support to the Environmental Sub-Committee (ESC) to ensure sustainable energy developments through sound economic, environmental and social practices. This support has seen environmental management issues taking centre stage to most activities and projects being implemented in the region. 2. Environmental Status of SAPP Transmission Projects 2.1 Zimbabwe-Zambia-Botswana-Namibia Interconnector (ZIZABONA) • Mbeya-Irringa line: The feasibility study including the ESIA has been financed by NELSAP and consultant for this activity will soon be appointed soon. • Way leave demarcation is being done along the IringaShinyanga 400bkV line passing through Dodoma and Singida. 3. Climate Change The Sixteenth Conference of Parties (COP 16) to the United Nations Framework Convention on Climate Change (UNFCCC) was held in Cancun, Mexico in November/December, 2010. Mr Johnson Maviya represented SAPP. The highlights of the conference are: • Acceptance of operational reforms to expand and streamline Clean Development Mechanism (CDM) activities • Availability of a loan scheme for countries with fewer than 10 registered CDM projects • All member states (signatories to the UNFCCC) including all SAPP member states should complete inventories of GHGs as a requirement under the COP. • USD 30 billion to be made available to developing countries for mitigation and adaptation needs. The next conference, COP 17 will be held in Durban, South Africa in November/December, 2011. Members from the four countries to be linked by the high voltage transmission infrastructure have engaged a consultant to undertake studies covering technical, marketing and environmental studies. Environmental Impact Assessment (EIA) study reports for the project were handed over to the consultant. In terms of environmental issues, further progress will only commence after the consultant has completed studies and mapped the way forward. 4. Renewable Energy and Energy Efficiency 2.2 DRC-Zambia Interconnector 4.1 Renewable Energy World Bank financing is available for the DRC portion. The project is now at compensation stage and affected communities will be compensated. The Environmental and Social Impact Assessment (ESIA) report has been completed and environmental consents to implement the project have been secured. Renewable Energy is a priority in the SAPP region. The goal is to utilise and benefit from significant renewable energy resources that exist in the region, adopt energy efficiency practices and achieve maximum energy efficient utilisation, and thus cutting down on energy related GHG emissions as the region’s contribution towards climate change stabilization. In this context the SAPP defines renewable energy as any form of energy from solar, geothephysical or biological source that is 2.3 Mozambique- Malawi Interconnector Contracts for feasibility studies as well as the 26
  • ENVIRONMENTAL SUB-COMMITTEE (ESC) ANNUAL REPORT replenished by natural processes at a rate that equals or exceeds its rate of use. The SAPP aims at exploiting the following forms of energy: • Wind • Solar Solar Hybrid installation in Namibia – described as one of the largest in Africa • Geothermal • Hydropower • Modern Bio-mass The SAPP aims at increasing the contribution of Renewable Energy from the current 20% to 25% by 2020 if all planned projects are implemented. 4.2 Energy Efficiency The SAPP is implementing Energy Efficiency measures as a means of meeting increasing demand. Energy Efficiency is concerned with delivery of energy services with reduced energy consumption. This can be achieved through technical changes, fuel substitution and demand side management practices. All SAPP member states have initiated energy efficiency initiatives which include the introduction of energy saving bulbs known as Compact Fluorescent Lamps (CFLs), Solar Water Heaters, Industrial and Commercial load shifting, Hot Water Load Control (HWLC), Technical Audits, commercial lighting and power correction factor. The aim is to save 1,650 by 2014. South Africa has set the target for improved energy efficiency at 12% by2015. The strategy includes Eskom’s Demand Side Management (DSM) which aims to save 4, 255 MW over a period of 20 years. 4.2.1 Compact Fluorescent Lamps (CFL) Disposal. Used CFLs have been classified has hazardous waste because of mercury contained in the bulbs and as such should be disposed of just as hazardous waste. The SAPP developed guidelines for the safe disposal of CFLs for utilities to use when advising municipalities and local authorities on the safe disposal of used CFLs. Each utility carried out an assessment of the capacity to handle and dispose CFLs in an environmentally friendly manner. Only South Africa and Namibia were found to have suitable facilities for the safe handling and disposal of CFLs. The rest would need to develop facilities that would see a separation of hazardous waste from nonhazardous waste and ensure safe disposal of hazardous waste. The SAPP would therefore assist municipalities and local authorities with best practices for the safe collection, handling, transportation and disposal of used CFL at a hazardous waste disposal site. 5. PCB Phase-out in the SAPP During the year under review, the SAPP was able to secure funding from United Nations Environmental Programme (UNEP)for the implementation of the PCB Phase-out project in the SADC region. All SAPP member states including Mauritius and Madagascar would benefit from the fund as long as the countries submit their National Implementation Plans (NIPs) to United Nations Environmental Programme. The project would include: • Capacity building at regional and SAPP utility level • Detailed inventories of all PCB contaminated equipment at SADC utilities • Development and tracking system for PCB contaminated equipment • Development of plan from risk based assessment for gradual replacement of PCB contaminated equipment and elimination • Environmentally Sound Services (ESS) available, collection system (oil and transformers), storage and transportation. • Awareness raising of key stakeholders, governments, public and private sector. The project expected to start in 2012 and end in 2017. 27
  • ENVIRONMENTAL SUB-COMMITTEE (ESC) ANNUAL REPORT Temporary Storage for PCB Contaminated Equipment at Kariba, Zambia 6. Sustainable Development Bulletin for the workshop was held in Maputo, Mozambique in June, 2010. All utilities were represented at the three-day Southern African Power Pool training workshop which was officially opened by the The year under review witnessed the launch of a EDM Board Member, Mr. A. De Sousa Fernando. monthly edition of the Sustainable Development Bulletin for the SAPP. The bulletin is intended to enhance awareness in environmental management within the SAPP. To date the editions dealing with the following topics have been published. • Climate Change • PCB Handling and Management • Energy Efficiency • Waste Management • Clean Development Mechanisms All editions cans be accessed on: www.sapp.co.zw 7. Training Members of the Environmental Sub- Committee received training on “Strategic Environmental Assessment” during the course of the year under review. The European Union sponsored training 28
  • ENVIRONMENTAL SUB-COMMITTEE (ESC) ANNUAL REPORT Members of the SAPP Environmental Sub-Committee who received training on “Strategic Environmental Assessment” in Maputo, Mozambique. 8. Key Performance Indicators 9. Acknowledgement All SAPP utilities reported on their Key Performance I would like to extent my gratitude to all members of Indicators during the year under review. It is the Environmental Sub-Committee for the hard work encouraging to note that significant progress was executed throughout the year, noting that made in terms of the following: • 90% of all SAPP utilites now have Environmental Policies in place • 50% of all SAPP utilites have established Environmental Management Systems • Several Environmental and Social Impact Assessments for both Generation and Transmission projects were completed and approved during the course of the year. • Environmental awareness programmes are taking place at utility level in all SAPP member states • Programmes to phase-out PCB contaminated equipment is in place at most utilities though funding for the activity is proving to be a challenge. • Energy efficiency and Demand Side Management programmes are being implemented at all SAPP utilities. this is my final year as the chairperson of the subcommittee. May I also take this opportunity to thank the Environmental Officer, Johnson Maviya for his efforts in co-ordinating all issues on Environmental Management within the SAPP. Mrs. Matseliso Moremoholo. Environmental Sub-Committee Chairperson. 29
  • SAPP COORDINATION CENTRE REPORT SAPP COORDINATION CENTRE 30
  • SAPP COORDINATION CENTRE REPORT 2.2 DAM system upgrade A contract between the SAPP-CC and NASDAQ was signed in 2010 for the upgrade of the SAPP day-ahead market (DAM) Trading Platform. It was agreed that the new upgrade would be delivered to the SAPP-CC in 2011 and would include a component on market surveillance and monitoring. 2.3 ZIZABONA Project The SAPP-CC was appointed as Project Coordinator for the Zimbabwe-Zambia-Botswana-Namibia (ZIZABONA) transmission project. The SAPP-CC managed to raise preparatory funds to the tune of In the year under review, the SAPP Coordination US$1 million for the project. The funding came from Centre (SAPP-CC) carried out a number of activities the Government of Norway and Sida (US$0.5 million) under the direction of the Coordination Centre and from DBSA (US$0.5 million). A consultant was Board, the Management Committee and the Executive appointed to provide consulting services and the Committee. The main activities were: transmission line is expected to be operational in 2014. i. Liaising with the government of Norway, Sida and the Development Bank of Southern Africa (DBSA) to secure preparatory funds for the Zimbabwe-ZambiaBotswana-Namibia (ZIZABONA) transmission project. Dr. Lawrence Musaba SAPP Coordination Centre Manager ii. Liaising with the Government of Norway and Sida to secure funding for the SAPP EMS/SCADA system and the Competitive Markets. 1. Projects Undertaken by SAPP-CC 2.1 Purchase of SAPP New Offices In the year 2010/11, the SAPP-CC managed to purchase a property that would be used as offices for the SAPP-CC. The SAPP-CC planned to shift to the new offices in the later part of 2011. 2.2 EMS/SCADA System The SAPP and AREVA/ACTOM consortium met on the 8th of June 2010 at the SAPP-CC in Harare for the EMS/SCADA Project contract negotiations. The contract documents were reviewed and the contract was signed between SAPP and AREVA/ACTOM for the delivery of the EMS/SCADA system. It was agreed that the project will commence on the 1st of July 2010 for a duration of one year. 31
  • SAPP COORDINATION CENTRE REPORT 2. Meetings 2.1 Joint OSC and MSC meeting on Transmission Capacity Allocation The Joint Operating Sub-Committee (OSC) and Markets Sub-Committee (MSC) meeting took place in Harare, Zimbabwe, on 21 April 2010. The meeting discussed and made key resolutions on handling of interchange energy imbalances, reservation of power transmission capacities in the wake of congestion, and allocation of day-ahead market (DAM) power wheeling revenue in the SAPP. 2.2 SADC Infrastructure Meeting A SADC Infrastructure meeting was held in Victoria Falls from 1 to 4 June 2010. This was the inaugural meeting for the telecommunication, transport, water and energy sectors. Common challenges encountered in the implementation of infrastructure projects and proposed strategies for improvement were drawn up. 2.3 Hydropower Africa 2010 The Hydropower Africa 2010 conference took place at Kempton Park in Johannesburg, South Africa from the 16th to the 20th of August 2010. The SAPP CC attended only on the 18th of August 2010 and made two presentations one on the SAPP Overview, (focusing on SAPP progress on projects implementation and power trading in the region) and the other one on the generation mix in the SAPP in the short, medium and long terms. 2.4 36th SAPP Committee Meetings The 36th SAPP meetings were held in Victoria Falls, Zimbabwe, from 8-11 February 2011, and were hosted by ZESA. The meetings were officially opened by the Minister of Energy and Power Development, Hon, Elton Mangoma. The issues discussed at the meetings included system operational and planning, the SAPP competitive market performance and environmental issues including climate change and upcoming COP17 that would be held in South Africa. 32 SAPP Delegates pose for a photo with the Minister of Energy and Power Development, Hon, Elton Mangoma (Centre) 2.5 SADC ETG Meeting The first SADC Energy Thematic Group (ETG) meeting for the year was held in Gaborone, Botswana, on 22 March 2011. The meeting focused on the status and progress of regional plans, programmes and activities. 2.6 Joint MSC and OSC Meeting on Treatment of Power Resident in Other countries and Wheeling The Joint Markets Sub-Committee (MSC) and Operating Sub-Committee (OSC) meeting on treatment of power resident in other countries and power wheeling was held at the SAPP-CC in Harare, Zimbabwe, on 28 March 2011. The meeting made resolutions on handling of counter power flows on transmission paths and on handling power belonging to a member but residing in a different country. The meeting also signed off the transmission capacity prioritisation table.
  • SAPP COORDINATION CENTRE REPORT The meeting also signed off the transmission capacity prioritisation table. 3.3 Africa Forum For Utility Regulators (AFUR) Workshop on Power Markets Structures and Models 3. Workshops and Technical Cooperation A workshop on power markets structures and models for Africa was held in Banjul, Gambia from the 30th of 3.1 E8 Workshop on Financing Sustainable May 2010 to the 4th of June 2010. The workshop was funded by the European Union. The main purpose Electrification of the workshop was to present the various power A workshop on Financing Sustainable Electrification market models for power utilities and regional power for Africa was held in Nairobi, Kenya, from the 13- pools in Africa. 15 of April 2010. The main focus on the workshop was on how Africa can access funding for renewable 3.4 PIDA TECHNICAL Committee Meeting and energy and also ensure that electrification projects the Kick-off Workshop, Addis Ababa, Ethiopia are sustainable especially rural electrification. The workshop was organised and sponsored by the E8 (a The Programme for Infrastructure Development in pool of European power utilities), GTZ, the UN etc. A Africa (PIDA) Technical Committee and Kick-off number of country presentations on the electrification Workshop was held in Addis Ababa from 28 to 30 programmes were made during the workshop. Rural July, 2010. The workshop was convened to review a electrification Agencies, regulatory authorities and PIDA study on regional/continental projects that power utilities across Africa attended the workshop. foster regional and continental integration and Attendance from the SADC region included, SADC participation of Africa in world trade. The project is Secretariat, RERA, SAPP, various countries that to be implemented through three phases; 1- diagnosis, included Botswana, Lesotho, Mozambique, Malawi, 2- planning, 3- consensus building in four sectors of South Africa, Namibia, Zambia and Zimbabwe energy, Transport, ICT and Water Resources. among others. Mr Musara Beta attended on behalf of 3.5 AFSEC General Assembly the SAPP. 3.2 Forum for Energy Ministers of Africa Mr Alison Chikova attended the AFSEC General Assembly that was held in Johannesburg, South Africa. The 3rd Forum for Energy Ministers of Africa was held AFSEC agreed to start to work on the following five in Cairo, Egypt from 31st May through to 2nd June, International Electro-technical Commission (IEC) 2010. The theme of the conference is “The Challenge technical standards in the following committees: of Balancing Energy Access and Climate Change Imperatives”. The key issues addressed included the • TC8 - System aspects for electrical energy TC 13 - Electrical energy measurement, tariff and following: • load control TC 57- Power system management and associated • Energy Initiatives and Bodies in Africa in the context of AU Institutional Arrangement • information exchange TC 64- Electrical installations and protection against Progress made thus far, and the strategic projections • electric shock for 2010-2012 and beyond • Expanding and fast tracking the regional energy • TC 77 Electromagnetic compatibility integration initiatives to achieve accelerated economic growth • Challenge of balancing energy access and climate change imperatives • Consultative dialogue on the proposed new global energy strategy for the World Bank on the proposed new global energy strategy for the World Bank. 33
  • SAPP COORDINATION CENTRE REPORT 3.6 Workshop on SADC-COMESA-EAC and IGAD Conference on Infrastructure Development The SAPP Chief Market Analyst, Mr Musara Beta, attended a workshop held in Nairobi, Kenya, on 7-8 September 2010. The purpose of the workshop was to prepare for the SADC-COMESA-EAC and IGAD Conference on Infrastructure development planned for 28-29 October 2010 in Nairobi, Kenya. The Conference was aimed to afford the member countries an opportunity to meet the European counterparts with the possibility of having partnerships in the development of Infrastructure with specific focus on: • Energy (excluding oil and gas); • Transport (Roads, Railways, Ports infrastructure, Border posts) and more specifically the corridors; • Services (engineering, construction); • ICT (e.g. Value added services), and • Water supply and sanitation 3.7 2nd Workshop on PPIAF Project on Commercial and Operational Performance Assessment of Selected SAPP Utilities The second workshop on the World Bank-PPIAF project on Commercial and Operational Performance Assessment of Selected SAPP Power Utilities was held on 18-19 October 2010 in Johannesburg, South Africa. The workshop was meant to discuss the consultant report, the consultant findings and the way forward on the project. Action plans to address the issues raised from the report were drawn for utilities to implement. All the four participating utilities, namely BPC of Botswana, EDM of Mozambique, LEC of Lesotho and ZESCO of Zambia attended the workshop. The SAPP was represented by the Coordination Centre Manager, Dr Lawrence Musaba and the Chief Market Analyst, Mr Musara Beta. 4. Support from Cooperating Partners 4.1 SAPP-Sida-Government of Norway Meeting The SAPP-Sida-Norwegian Government Annual General Meeting was held in Harare, Zimbabwe, on 10th May 2010 and all parties were represented. The meeting discussed the milestones achieved under the Norwegian government and Sida support to the SAPP and the planned activities for the coming year 34 2010/11. The Government of Norway and Sida agreed to provide continued financial support to the SAPPCC. 4.2 World Bank-PPIAF The World Bank, under the PPIAF facility, provided a grant to the tune of US$326,000 to the SAPP-CC to carry out a Commercial and Operational Performance Assessment of Selected SAPP Utilities in the SADC region. Four utilities were selected for the exercise and it was expected that a full credit rating exercise would be done on the selected four before extending the program to the other members of the pool.
  • SAPP COORDINATION CENTRE REPORT 5. Acknowledgement I would like to take this opportunity and thank members of staff of the SAPP Coordination Centre for their hard work during the year that has gone by. Dr. Lawrence Musaba SAPP Coordination Centre Manager 35
  • SAPP STATISTICS Table1: SAPP Existing Generation Stations Year 2010/11 Installed Capacity vs Peak Demand 36
  • SAPP STATISTICS Table 2: Key Statistics 2010/11 Graph 1: Number of Customers per Employee 2010/11 37
  • 38 C SA ZE S TA EB N ES CO ZE SC O ED M Na m po we r ES KO M CO M ES LE EL SN BP C E EN SAPP STATISTICS Graph 2: Utility Debtor Days 2010/11
  • SAPP STATISTICS AND FORECASTS Appendix 1: Planned Generation Projects in SADC Countries, MW Table 1: SAPP Utility General Information 2010 Statistics 39
  • SAPP STATISTICS AND FORECASTS Table 2 : Annual Maximum Demand Forecast: 2011 to 2025, MW Table 3 Energy Forecast: 2011 to 2025, GWh 40
  • FINANCIAL STATEMENTS SOUTHERN AFRICAN POWER POOL FINANCIAL STATEMENTS for the year ended 31 March 2011 Contents Page Statement of Directors’ Responsibility Report of the Independent Auditors Statement of Income and Expenditure Statement of Financial Position Statement of Changes in Shareholders’ Funds Statement of Cash Flows Notes to the Financial Statements 42 43 44 45 46 47 48 - 67 41
  • FINANCIAL STATEMENTS STATEMENT OF DIRECTORS’ RESPONSIBILITY The Directors of Southern African Power Pool “the Organisation” are responsible for the maintenance of adequate accounting records and the preparation and integrity of the financial statements and related information. The auditors are responsible for reporting on the fair presentation of the financial statements. The Directors are also responsible for the Organisation’s systems of internal control. These are designed to provide reasonable, but not absolute, assurance as to the reliability of the financial statements, and to adequately safeguard, verify and maintain accountability for the Organisation’s assets, and to prevent and detect misstatement and loss. The systems are implemented and monitored by suitably trained personnel with an appropriate segregation of authority and duties. Nothing has come to the attention of the Directors to indicate that any material breakdown in the functioning of these controls, procedures and systems has occurred during the year under review. The financial statements have been prepared on the going concern basis since the Directors believe that the Organisation has adequate resources in place to continue in operation for the foreseeable future. The financial statements for the year ended 31 March 2011 set out on pages 44 to 67 were approved by the Board of Directors on 13 January 2012 and signed on its behalf by:DIRECTORS .............................................. .............................................. 19 September 2011 42
  • FINANCIAL STATEMENTS: REPORT OF INDEPENDENT AUDITORS Report on the financial statements to the members of Southern African Power Pool We have audited the accompanying financial statements of Southern African Power Pool, which comprise the statement of financial position as at 31 March 2011, the statement of income and expenditure, statement of changes in shareholders’ funds and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on pages 44 to 67. Directors’ responsibility for the financial statements The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements, in all material respects, give a true and fair view of the financial position of Southern African Power Pool as at 31 March 2011 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards. .............................................. DELOITTE & TOUCHE Chartered Accountants. Harare, Zimbabwe 19 September 2011 43
  • FINANCIAL STATEMENTS STATEMENT OF INCOME AND EXPENDITURE for the year ended 31 March 2011 Note Total income Expenditure Total expenditure Deficit for the year 44 7 926 060 234 335 87 876 87 876 58 584 58 584 58 514 1 090 57 940 5 370 --------------1 576 229 --------------- 4 340 10 398 24 310 --------------39 048 --------------3 195 704 Other income Interest received - bank Exchange gain Sundry income 2010 US$ 2 134 687 341 328 127 998 127 998 85 332 85 332 85 332 68 162 54 467 46 020 --------------3 156 656 --------------- Revenue Grant utilised Equal share for members Imported energy Exported energy Peak demand Thermal rating Host member Day-Ahead-Market (DAM) administration fees Participation fees Recurring capital expenditure 2011 US$ 8 303 15 376 --------------23 679 --------------1 599 908 (3 454 278) --------------(258 574) (2 194 028) --------------(594 120)
  • FINANCIAL STATEMENTS STATEMENT OF FINANCIAL POSITION as at 31 March 2011 Note 2011 2010 US$ US$ ASSETS Non-current assets Property and equipment 8 727 286 938 306 --------------- --------------Total non-current assets 727 286 938 306 --------------- --------------Current assets Inventories 5 060 2 586 Trade and other receivables 9 85 228 45 183 Members Day-Ahead-Market (DAM) accounts 10 1 590 319 7 908 161 Cash and bank balances: - Co-ordination Centre funds 635 860 710 490 - Special fund – Norwegian Government Grant (NORAD) 11.1 62 205 77 570 - Special fund – Norwegian Government Grant (RNE/SAPP) 11.2 1 521 898 2 127 160 - Special fund – World Bank Grant 11.3 33 608 266 500 - Special fund – European Union Grant 11.4 6 265 2 306 - Special fund – United Nations Environment Programme 11.5 45 000 - Special fund – ZIZABONA 11.6 8 995 13 192 - Special fund – Development Bank of South Africa - 479 --------------- --------------Total current assets 3 994 438 11 153 627 --------------- --------------Total assets 4 721 724 12 091 933 EQUITY AND LIABILITIES Shareholders' funds General reserve Members contribution for capital expenditure Accumulated fund Total shareholders’ funds Special funds - Norwegian Government Grant – Botswana 11.1 - Norwegian Government Grant – Norway 11.2 - SAPP World Bank 11.3 - SAPP European Union 11.4 - SAPP United Nations Environment Programme 11.5 - ZIZABONA Project 11.6 Total special funds Current liabilities Trade and other payables 12 Members Day-Ahead-Market (DAM) deposits 10 Total current liabilities Total equity and liabilities DIRECTORS: 19 September 2011 100 000 100 000 337 842 333 950 891 856 1 150 430 --------------- --------------1 329 698 1 584 380 --------------- --------------62 205 77 570 1 539 150 2 127 160 33 608 266 500 6 265 2 306 45 000 8 995 13 192 --------------- --------------1 695 223 2 486 729 --------------- --------------106 484 112 664 1 590 319 7 908 161 --------------- --------------1 696 803 8 020 825 --------------- --------------4 721 724 12 091 933 .............................................. .............................................. 45
  • FINANCIAL STATEMENTS STATEMENT OF CHANGES IN SHAREHOLDERS’ FUNDS for the year ended 31 March 2011 General reserve US$ Balance at 31 March 2009 (restated) Deficit for the year Members net capital contribution utilised Balance at 31 March 2010 Deficit for the year Members net capital contribution received Balance at 31 March 2011 46 Members contribution for capital expenditure US$ Accumulated fund US$ Total US$ 100 000 338 012 1 744 550 2 182 562 --------------100 000 (4 062) --------------333 950 (594 120) (594 120) (4 062) --------------- --------------1 150 430 1 584 380 --------------100 000 3 892 --------------337 842 (258 574) (258 574) 3 892 --------------- --------------891 856 1 329 698
  • FINANCIAL STATEMENTS STATEMENT OF CASH FLOWS for the year ended 31 March 2011 2011 2010 US$ US$ Cash flows from operating activities Deficit for the period (258 574) (594 120) Adjustment for - Depreciation of property and equipment 463 768 464 005 - Interest received (4 340) (8 303) --------------- --------------Operating cash flow before working capital changes 200 854 (138 418) Increase in inventories (2 474) (1 649) (Increase)/ decrease in trade and other receivables (40 045) 297 696 Decrease/ (increase) in Members Day-Ahead-Market accounts 6 317 842 (4 843 988) (Decrease)/ Increase in Day-Ahead-Market deposits (6 317 842) 4 919 694 (Decrease)/ Increase in trade and other payables (6 180) (200 051) --------------- --------------Net cash generated by operating activities 152 155 33 284 --------------- --------------Cash flows from investing activities Purchases of property and equipment (252 748) (4 111) Interest received 4 340 8 303 Proceeds on disposal of property and equipment - 127 --------------- --------------Net cash (used in)/ generated from investing activities (248 408) 4 319 --------------- --------------Cash flows from financing activities (Increase)/ decrease in grants utilised (791 505) 1 469 308 Members capital contribution received/ (utilised) 3 892 (4 062) --------------- --------------Net cash (used in)/ generated from financing activities (787 613) 1 465 246 Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year (883 866) 1 502 849 3 197 697 1 694 848 --------------- --------------2 313 831 3 197 697 47
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 March 2011 1. COUNTRY OF INCORPORATION S outhern African Power Pool is a non-profit making organisation incorporated in Zimbabwe. 2. NATURE OF BUSINESS The main object of the organisation is to co-ordinate the planning and development of the electricity interconnections between members' respective networks and to expand the Interconnected Power System and electricity trading in the region. 3. PRESENTATION CURRENCY Th e financial statements are presented in United States Dollars (US$), being the Organisation’s functional currency. 4. DOPTION OF NEW AND REVISED STANDARDS A 4.1 Standards and interpretations adopted with no effect on the financial statements The following new and revised standards and interpretations have been adopted in these financial statements. Their adoption has not had any significant impact on the amounts reported in these financial statements but may affect the accounting for future transactions or arrangements. • IFRIC19: Extinguishing Financial Liabilities with Equity Instruments. Effective for annual periods beginning on or after 1 July 2010 4.2 tandards, interpretations and amendments to published standards that are not yet effective S At the date of authorisation of these financial statements, the following standards and interpretations, which are applicable to the Company, were either issued or revised but not yet effective. • IFRS 1 • IFRS 3 • IFRS 7 • IFRS 9 • IFRS 10 • IFRS 11 • IFRS 12 • IFRS 13 48 First time adoption of International Financial Reporting Standards (Revised January 2010). Effective for annual periods beginning on or after 1 July 2010; Business Combinations- Amendments resulting from May 2010 Annual Improvements to IFRSs. Effective for annual periods beginning on or after 1 July 2010; Financial Instruments: Disclosures (issued October 2010). Effective for annual periods beginning on or after 1 July 2011; Financial Instruments Classification and Measurement. Effective for annual periods beginning on or after 1 January 2013; Consolidated Financial Statements (issued May 2011). Effective for annual periods beginning on or after 1 January 2013; Joint Arrangements (issued May 2011). Effective for annual periods beginning on or after 1 January 2013; Disclosure of Interests in Other Entities (issued May 2011). Effective for annual periods beginning on or after 1 January 2013; Fair Value Measurement (issued May 2011). Effective for annual periods beginning on or after 1 January 2013;
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 4. ADOPTION OF NEW AND REVISED STANDARDS (continued) 4.2 tandards, interpretations and amendments to published standards that are not yet effective (continued) S • IAS 1 • IAS 12 • IAS 19 • IAS 24 • IAS 27 • IAS 28 • IAS 34 • IFRIC 13 Presentation of Financial Statements (issued June 2011). Effective for annual periods beginning on or after 1 July 2012; Income Taxes ( issued December 2010) Effective for annual periods beginning on or after 1 January 2012; Employee Benefits (issued June 2011). Effective for annual periods beginning on or after 1 January 2013; Related Party Disclosures. Effective for annual periods beginning on or after 1 January 2011; Consolidated and Separate Financial Statements (revised May 2011), reissued as IAS 27 Separate Financial Statements ( as amended in 2011). Effective for annual periods beginning on or after 1 January 2013; Investments in Associates ( issued May 2011)- Revised as IAS 28 Investments in Associates and Joint Ventures (as amended in 2011). Effective for annual periods beginning on or after 1 January 2013; Interim Financial Reporting. Effective for annual periods beginning on or after 1 January 2011; Customer Loyalty Programmes. Effective for annual periods beginning on or after 1 January 2011; The Directors anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the Organization. 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Th e principal accounting policies of the Organisation, which are set out below, are consistent in all material respects with those applied in the previous year. 5.1 Basis of preparation Th e financial statements have been prepared on the historical cost basis. Historical cost is generally based on the fair value of the consideration given in exchange for assets. 5.2 Reporting framework and statement of compliance Th e financial statements have been prepared in conformity with International Financial Reporting Standards (IFRS), promulgated by the International Accounting Standards Board (IASB), which includes standards and interpretations approved by the IASB as well as International Accounting Standards and Standing Interpretations Committee (SIC) interpretations issued under previous constitutions (IFRS’s). The financial statements are based on statutory records that are maintained under the historical cost convention. 49
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 5.3 Property and equipment Property and equipment are stated at cost less depreciation and impairment losses. Depreciation is calculated on the straight-line method so as to write off the cost of assets to their residual value over their estimated useful lives at the following rates: Computer equipment 33.33% Office equipment 20% Office furniture and fittings 10% An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of income and expenditure in the year the asset is derecognised. The Directors make an assessment of the useful lives and residual values of the assets on an annual basis. 5.4 Cash and cash equivalents Cash and cash equivalents are defined as cash on hand, demand deposits and short term, highly liquid investments with an original maturity of three months or less, net of bank overdrafts that are readily convertible into known amount of cash and subject to insignificant risk of change of value. 5.5 Special funds Funds granted for specific purposes are accounted for separately as Special Funds in the statement of financial position. They are maintained in a separate bank account, any interest earned on the unused funds is credited to, and bank charges are debited to, the Special Fund. The amount expended is recognised as income on a systematic and rational basis over the period necessary to match them with the related costs. Grants related to assets are capitalised with the amount utilised for the period amortised to the income and expenditure account. 5.6 Provisions Provisions are recognised when the Organisation has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amounts of the obligation. 5.7 Employment benefits Employee benefits are the consideration given by the Organization in exchange for services rendered by employees. In summary such benefits are: Short-term benefits Benefits earned by employees under normal employment terms including salaries, wages, bonuses and leave pay. These are expensed as earned and accordingly provisions are made for unpaid bonuses and leave pay. Post-employment benefits Retirement benefits are provided for the Organisation employees through the National Social Security Authority (NSSA) scheme. Employer's contributions to the NSSA scheme are charged to the statement of income and expenditure when due. 50
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 5. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 5.8 Revenue recognition Funds income received is based on a set budget agreed upon by all members of the Organisation. Contributions made by members are based on set percentages and proportions based on electricity usage. The income is brought to account per issued invoice to each of the member countries. Interest revenue is recognised when it is probable that the economic benefits will flow to the Organisation and the amount of revenue can be measured reliably. Grant income for specific projects is recognised when the respective expenditure has been incurred. 5.9 Trade and other receivables Receivables are measured at amortised cost. Appropriate allowances for estimated irrecoverable amounts are recognised in the statement of income and expenditure when there is objective evidence that the asset is impaired. 5.10 Trade and other payables Payables are measured at amortised cost. 5.11 Foreign currency transactions Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the reporting date. Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in the statement of income and expenditure. 5.12 Day Ahead Market (DAM) bank accounts The DAM operates a substantial number of accounts which are maintained at Stanbic Bank Botswana Limited. The purpose of these accounts is primarily for clearing purposes, accounting for market transactions, security custodial services, administration fees, wheeling fees and transmission losses. 6. CRITICAL JUDGEMENTS IN APPLYING THE ENTITY’S ACCOUNTING POLICIES I n the process of applying the Organisation’s accounting policies, management made the following judgments that have a significant effect on the amounts recognised in the financial statements: Useful lives and residual values of property and equipment. Th e Organisation assesses useful lives and residual values of property and equipment each year taking into account past experience and technology changes. The Directors have assessed the useful lives in the current year and determined that changes to the current useful lives are not necessary. The residual values have been based on the market values of the assets. 51
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 7. EXPENDITURE ADMINISTRATIVE COSTS Grant utilised Software purchases & maintenance Audit fees Conferences workshops & seminars Insurance Postages & couriers Printing, photocopying & stationery Repairs and maintenance - Office equipment Computer consumables & networks Bad debts Consultancy fees (paid to NordPool and Norconsult) Newspapers, books & periodicals Member subscriptions Decorations and gifts Repairs and maintenance - Furniture & fittings Repairs and maintenance - Computer equipment Foreign exchange loss SAPP annual report Legal fees General expenses Customs, storage e.t.c. MARKETING & PUBLICITY Advertising & promotions Entertainment COMMUNICATION COSTS DAM hardware maintenance VSAT Telecommunications Telephone & fax charges Internet & e-mail charges Cellphone charges TRAVEL & SUBSISTENCE Travel – International Accommodation & meals Per Diem allowance Travel – Local Visa applications Commission, VAT & administration charges Telephone expenses Mileage claim Balance carried forward 52 2011 2010 US$ US$ 2 161 379 16 388 12 500 12 193 11 981 2 496 2 258 1 144 1 041 816 815 265 170 86 72 4 - - - - - 12 841 9 250 13 141 3 752 8 140 1 541 272 779 898 501 375 11 1 712 40 416 9 240 1 230 438 253 666 391 45 839 73 818 56 148 9 303 5 845 2 061 20 667 78 089 8 729 3 882 1 164 40 251 58 117 22 107 27 263 15 727 16 720 4 832 6 756 1 101 541 513 75 118 - 65 --------------- --------------2 456 128 1 225 205
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 7. EXPENDITURE (continued) Balance brought forward DEPRECIATION Computer equipment Furniture & fittings Office equipment 2011 2010 US$ US$ 2 456 128 1 225 205 456 200 1 090 6 478 456 603 1 185 6 217 OCCUPANCY COSTS Property rent 29 088 23 308 R ates, electricity & water charges 21 034 15 248 Cleaning expenses 2 765 2 366 R epairs & maintenance – occupancy 959 1 887 STAFF COSTS Basic salaries Staff welfare Cash in lieu of leave Annual bonus Medical aid W orker compensation insurance Staff training Subscriptions allowance NSSA Work permits Acting allowance Teas & lunches Staff uniforms Overtime Recruitment costs M edical expenses (First aid box) Discretionary payments Short time FINANCE CHARGES Bank charges Withholding tax on interest TOTAL EXPENDITURE 372 857 45 105 16 987 10 932 9 335 6 622 2 948 2 508 1 281 1 100 965 746 408 322 28 - - (191) 356 527 21 904 33 133 9 497 5 091 7 892 1 195 2 861 8 377 1 800 146 1 383 95 391 181 2 974 - 8 357 8 529 226 33 --------------- --------------3 454 278 2 194 028 53
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 8. PROPERTY AND EQUIPMENT Cost Land and buildings Computer equipment & software Office equipment Furniture & fittings Total Depreciation Land and buildings Computer equipment & software Office equipment Furniture & fittings Total Carrying amount Land and buildings Computer equipment & software Office equipment Furniture & fittings 54 2010 US$ Additions US$ Disposals US$ 2011 US$ 4 098 764 61 962 38 000 --------------4 198 726 249 225 2 261 130 1 132 --------------252 748 --------------- 249 225 4 101 025 62 092 39 132 --------------4 451 474 2010 US$ Charge for the year US$ Disposals US$ 2011 US$ (3 187 181) (43 959) (29 280) --------------(3 260 420) (456 200) (6 478) (1 090) --------------(463 768) --------------- (3 643 381) (50 437) (30 370) --------------(3 724 188) 2010 US$ 911 583 18 003 8 720 --------------938 306 2011 US$ 249 225 457 644 11 655 8 762 --------------727 286
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 8. PROPERTY AND EQUIPMENT (continued) Cost Computer equipment & software Office equipment Furniture & fittings Total Depreciation Computer equipment & software Office equipment Furniture & fittings Total Carrying amount Computer equipment & software Office equipment Furniture & fittings 2009 US$ Additions US$ 4 096 756 3 289 61 792 170 37 348 652 --------------- --------------4 195 896 4 111 2010 US$ Charge for the year US$ (2 731 732) (456 603) (37 742) (6 217) (28 095) (1 185) --------------- --------------(2 797 569) (464 005) 2009 US$ 1 365 024 24 050 9 253 --------------1 398 327 Disposals/ transfers US$ 2010 US$ (1 281) 4 098 764 61 962 38 000 --------------- --------------(1 281) 4 198 726 Disposals US$ 2011 US$ 1 154 (3 187 181) (43 959) (29 280) --------------- --------------1 154 (3 260 420) 2010 US$ 911 583 18 003 8 720 --------------938 306 55
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 2011 2010 US$ US$ 9. TRADE AND OTHER RECEIVABLES T rade receivables - 23 535 P repayments 85 228 11 767 O ther receivables - 9 881 --------------- -------------- 228 85 45 183 I n the prior year, the trade receivables largely related to members’ outstanding contributions. No allowance for doubtful debts was made as these receivables were recoverable in full from the members. 10. MEMBERS DAY-AHEAD-MARKET (DAM) ACCOUNTS 2011 Member account US$ 2010 US$ SAPP Security Zesco 478 294 5 174 SAPP NamPower DAM USD 266 463 7 563 953 SAPP SEC DAM USD 200 173 SAPP EDM DAM USD 132 795 176 846 SAPP ESKOM DAM ZAR 129 283 6 447 SAPP Security ZESA 106 820 106 343 SAPP BPC DAM USD 97 546 3 960 DAM Congestion Income 77 760 SAPP ZESA DAM USD 40 019 275 SAPP NamPower DAM Security ZAR 26 815 23 938 SAPP HCB DAM Security USD 10 188 10 158 SAPP DAM LOSES USD 6 521 120 SAPP Eskom DAM USD 5 804 4 989 SAPP EDM DAM Security USD 5 195 5 179 SAPP DAM WHEELING USD 5 050 202 SAPP NamPower DAM ZAR 378 35 SAPP DAM LOSES ZAR 331 307 SAPP ZESA DAM ZAR 298 SAPP HCB DAM USD 271 SAPP DAM WHEELING ZAR 228 210 SAPP Zesco DAM ZAR 35 SAPP EDM ZAR 27 25 SAPP HCB DAM ZAR 25 --------------- -------------- 319 1 590 7 908 161 The DAM operates a substantial number of accounts which are maintained at Stanbic Bank Botswana Limited. The purpose of these accounts is primarily for clearing purposes, accounting for market transactions, security custodial services, administration fees, wheeling fees and transmission losses. 56
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS 11.1 Norwegian Government Grant (NORAD) – Botswana US$ Balance at 1 April 2010 77 570 Payments: Bank date: Victor Utedzi Bjorg Rode 28.05.2010 28.05.2010 (10 878) (4 482) Bank charges: (136) Interest received 131 --------------Balance at 31 March 2011 62 205 Represented by: Special fund – Norwegian Government Grant (NORAD) – Botswana 62 205 --------------Balance as at 31 March 2011 62 205 Balance at 1 April 2009 97 850 Payments Bank date: Charity Machimbidzofa McLennan Magasanik Associates 13.01.2010 23.02.2010 (600) (19 788) Bank charges: (86) Interest received 194 --------------Balance at 31 March 2010 77 570 Represented by: Special fund – Norwegian Government Grant (NORAD) – Botswana 77 570 --------------Balance as at 31 March 2010 77 570 The goal of the project funded by the Government of Norway is to provide least cost, environmentally friendly and affordable energy and increase accessibility for rural areas in Southern Africa through the development of a competitive electricity market. 57
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.2 Norwegian Government Grant (RNE/SAPP) - Norway NOK US$ Balance as at 1 April 2010 12 716 925 2 127 160 Norwegian Emabssy in Maputo 07.12.2010 4 744 000 Refund from Intercontinental Hotel 14.02.2011 17 660 Payments Bank date: 791 821 3 039 Nordpool ASA 22.04.2010 (120 252) (20 366) Norconsult 04.05.2010 (37 200) (6 267) Power Planning Associates 21.06.2010 (68 292) (10 747) Norconsult 21.06.2010 (85 300) (13 390) Actom Proctection & Control 21.06.2010 (3 216 915) (507 000) Norconsult 20.07.2010 (93 026) (14 853) Airport Grand Hotel 22.07.2010 (46 462) (7 418) Victor Utedzi 09.08.2010 (23 870) (4 016) Power Planning Associates 24.08.2010 (65 318) (10 484) Bjorg Rode 24.08.2010 (66 926) (10 742) Nordpool Consulting ASA 22.09.2010 (156 600) (25 983) Power Planning Associates 01.10.2010 (94 768) (16 159) Actom Proctection & Control 01.10.2010 (2 976 597) (507 000) Norconsult 29.10.2010 (57 150) (9 720) Intercontinental Hotel Lusaka 16.11.2010 (83 314) (13 963) PPA Energy 03.12.2010 (60 126) (9 819) Norconsult 08.12.2010 (78 353) (13 106) Loci Environmental 28.12.2010 (191 856) (32 178) Residome Apparthotel 24.01.2011 (111 211) (19 185) SAPP 8.01.2011 2 (257 674) (44 259) SAPP 8.02.2011 2 (178 653) (31 672) Nord Pool Consulting 08.03.2011 (873 000) (157 363) Bank Charges: Bank Charges 06.04.2010 (119) (20) Bank Charges 03.05.2010 (110) (19) Bank Charges 01.06.2010 (110) (17) Bank Charges 01.07.2010 (200) (32) Bank Charges 19.07.2010 (1 200) (192) Bank Charges 02.08.2010 (170) (28) Bank Charges 01.09.2010 (555) (88) Bank Charges 01.10.2010 (110) (19) Bank Charges 01.11.2010 (200) (34) Bank Charges 01.12.2010 (165) (27) Bank Charges 04.01.2011 (230) (39) Bank Charges 01.02.2011 (195) (34) Bank Charges 01.03.2011 (220) (39) Interest received 43 493 7 376 Exchange Gain 96 032 --------------- --------------Balance as at 31 March 2011 8 575 631 1 539 150 58
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.2 orwegian Government Grant (RNE/SAPP) – Norway (continued) N US$ Represented by: Special fund – Norwegian Government Grant (RNE/SAPP) - Norway 1 521 898 Prepayments 17 252 --------------Balance as at 31 March 2011 1 539 150 6 072 607 895 515 Balance as at 1 April 2009 Refund from Nordpool Consulting AS 20.08.2009 1 468 100 Additional advance 15.10.2009 11 300 000 Payments Bank date: 240 034 2 023 830 Nordpool ASA 15.04.2009 (1 468 100) (222 542) Nordpool ASA 15.06.2009 (1 318 100) (203 530) Statnett 03.09.2009 (88 000) (14 423) Norconsult 26.10.2009 (294 208) (52 840) Nordpool ASA 09.11.2009 (171 101) (30 011) Norconsult 11.11.2009 (140 031) (25 023) SAPP 0.11.2009 2 (139 770) (25 000) Nordpool ASA 27.11.2009 (147 436) (26 258) Norconsult 19.01.2010 (664 126) (117 052) Norconsult 19.02.2010 (60 577) (10 224) Rica Hotels 26.02.2010 (14 320) (2 400) Nordpool ASA 05.03.2010 (1 427 100) (241 308) Norconsult 15.03.2010 (133 528) (22 872) Eskom Enterprises Enerweb 22.07.2009 (7 780) (1 333) Airport Grand Hotel 07.08.2009 (78 124) (12 974) Southern African Power Pool 07.09.2009 (18 924) (3 242) Bank Charges: Bank Charges 02.04.2009 Bank Charges 04.05.2009 Bank Charges 02.06.2009 Bank Charges 13.06.2009 Bank Charges 24.06.2009 Bank Charges 01.07.2009 Bank Charges 14.07.2009 Bank Charges 03.08.2009 Bank Charges 27.08.2009 Bank Charges 01.09.2009 Bank Charges 17.09.2009 Bank Charges 17.09.2009 Balance carried forward (80) (12) (80) (12) (80) (13) (100) (16) (100) (15) (80) (12) (1 200) (201) (80) (13) (160) (26) (160) (26) (80) (13) (160) (27) --------------- --------------12 766 726 2 147 597 59
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.2 Norwegian Government Grant (RNE/SAPP) - Norway (continued) NOK US$ 12 766 726 2 147 597 Bank Charges 02.10.2009 (100) Bank Charges 02.11.2009 (80) Bank Charges 01.12.2009 (80) Bank Charges 03.12.2009 (80) Bank Charges 03.12.2009 (160) Bank Charges 18.12.2009 (100) Bank Charges 18.12.2009 (100) Bank Charges 18.12.2009 (100) Bank Charges 04.01.2010 (80) Bank Charges 01.02.2010 (85) Bank Charges 02.03.2010 (90) Bank Charges (17) (14) (14) (14) (29) (17) (17) (17) (14) (14) (15) Balance brought forward Interest received 50 856 8 790 Exchange Loss - (29 409) --------------- --------------Balance as at 31 March 2010 12 716 925 2 127 160 Represented by: Special fund – Norwegian Government Grant (RNE/SAPP) - Norway 2 127 160 --------------Balance as at 31 March 2010 2 127 160 Th e goal of the project funded by the Government of Norway is to provide least cost environmentally friendly and affordable energy and increase accessibility for rural areas in Southern Africa through the development of a competitive electricity market. 11.3 SAPP World Bank US$ Balance as at 1 April 2010 Payments Bank date: 266 500 Mercados 27.05.2010 (57 604) Mercados 20.09.2010 (86 406) Choice 12.10.2010 (1 741) Mercados 01.12.2010 (57 604) Mercados 13.01.2011 (28 802) Bank Charges: Service fee 30.04.2010 (10) Telegraphic Transfer Charge 27.05.2010 (125) Service fee 31.05.2010 (10) Service fee 30.06.2010 (10) --------------Balance carried forward 34 188 60
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.3 APP World Bank (continued) S Balance brought forward US$ 34 188 Service fee 31.07.2010 (20) Service fee 31.08.2010 (20) Telegraphic Transfer Charge 20.09.2010 (125) Service fee 30.09.2010 (20) Commission 13.10.2010 (25) Service fee 31.10.2010 (20) Service fee 30.11.2010 (20) Commission 02.12.2010 (125) Service fee 31.12.2010 (20) Commission 13.01.2011 (125) Service fee 31.01.2011 (20) Service fee 28.02.2011 (20) Service fee 31.03.2011 (20) --------------Balance as at 31 March 2011 33 608 Represented by: Special fund – World Bank Grant 33 608 --------------Balance as at 31 March 2011 33 608 Balance as at 1 April 2009 Advance 04.05.2009 326 925 Payments Bank date: Mondior Hotel Gaborone Mercados 22.02.2010 17.03.2010 (2 649) (57 604) Bank charges: Service fee 31.01.2010 (10) Service fee 28.02.2010 (10) RTGS forms 09.03.2010 (3) RTGS commission 09.03.2010 (10) RTGS book 17.03.2010 (5) Telegraphic transfer charge 17.03.2010 (125) Service fee 31.03.2010 (9) --------------Balance as at 31 March 2010 266 500 Represented by: Special fund – World Bank Grant 266 500 --------------Balance as at 31 March 2010 266 500 The grant is earmarked for the "Operational and Performance Assessment study of selected SAPP Member Power Utilities." This was expected to run from January 2010 to February 2011. 61
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.4 SAPP European Union US$ Balance as at 1 April 2010 Advances: 2 306 SOFRECO 06.04.2010 SOFRECO 04.05.2010 SOFRECO 17.06.2010 SOFRECO 11.08.2010 SOFRECO 01.10.2010 Deposit for absent delegates - Capacity Building Programme Workshop 03.12.2010 13 968 13 968 42 676 24 962 26 962 469 Bank date: Payments Airfares Workshop on Trandmission Planning 26.04.2010 Refund to SAPP World Bank Account Dvpt & Implementation of Power Trade Arrangements) 26.04.2010 Airfares Workshop No.5 ESC 06.04.2010 Airfares Europe study Tour 18.06.2010 Airfares Europe study Tour 24.06.2010 Car Travel Reimbursement 30.06.2010 Airfares Workshop No.5 ESC 13.07.2010 Airfares for the PSSE and PPP Workshop 12.08.2010 Allowances for the PSSE and PPP Workshop 14.08.2010 Refund to SAPP CC (Allowances - Europe Study Tour & ESC Workshops) 27.08.2010 Refund to NAMPOWER Airtickets France Trip 31.08.2010 Airfares for the Capacity Building Programme Workshop 28.10.2010 Allowances for the Capacity Building Programme 10.11.2010 Bank charges: (8 842) (5 757) (13 958) (39 440) (2 298) (355) (523) (8 943) (3 228) (4 040) (4 028) (13 168) (13 938) Statement Fee 06.04.2010 (1) Statement Fee 07.04.2010 (1) Transfer Charges 26.04.2010 (1) Transfer Charges 26.04.2010 (1) Statement Fee 29.04.2010 (1) Service Fee 30.04.2010 (10) Statement Fee 06.05.2010 (1) RTGS Commission 06.05.2010 (10) Service Fee 31.05.2010 (10) Statement Fee 07.05.2010 (1) Transfer Charges 18.06.2010 (10) RTGS Commission 24.06.2010 (10) Service Fee 30.06.2010 (10) Intermediary Tax 13.07.2010 (0) Service Fee 31.07.2010 (20) Statement Fee 02.08.2010 (1) Statement Fee 06.08.2010 (1) Statement Fee 11.08.2010 (1) Statement Fee 12.08.2010 (10) --------------Balance carried forward 6 693 62
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.4 SAPP European Union (continued) US$ Balance brought forward 6 693 Service Fee 31.08.2010 (20) Service Fee 30.09.2010 (20) Statement Fee 08.10.2010 (1) Cash withdrawal commission 28.10.2010 (130) Service Fee 31.10.2010 (20) Cash withdrawal commission 10.11.2010 (137) Service Fee 30.11.2010 (20) Service Fee 31.12.2010 (20) Service Fee 31.01.2011 (20) Service Fee 28.02.2011 (20) Service Fee 31.03.2011 (20) --------------Balance as at 31 March 2011 6 265 Represented by: Special fund – European Union Grant 6 265 --------------Balance as at 31 March 2011 6 265 Balance as at 1 April 2009 Advances: SAPP (Opening account) 07.07.2009 200 Deposit Refund Absent delegate (dinner allowance) 27.08.2009 200 SOFRECO 31.07.2009 12 468 SOFRECO 16.10.2009 7 968 SOFRECO 20.01.2010 12 968 Deposit Refund Absent delegate (dinner allowance less printing SOFRECO certificate) 09.02.2010 159 SOFRECO 15.03.2010 9 568 Bank date: Payments Airfares Network Reliability Workshop 1 18.08.2009 (6 907) Dinner Allowance Network Reliability Workshop 1 17.08.2009 (3 000) Refund to SAPP (used to open account) 04.09.2009 (200) Airfares Network Reliability Workshop 2 03.11.2009 (8 139) Dinner Allowance Network Reliability Workshop 2 28.01.2010 (3 200) Change of Booking fee 28.01.2010 (75) Airfares Generation and Transmission Planning 26.01.2010 (7 530) Dinner Allowance Generation and Transmission Planning 26.01.2010 (3 200) Airfares Power Trade Arrangements 17.03.2010 (8 738) --------------Balance carried forward 2 542 63
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.4 APP European Union (continued) S US$ Balance brought forward 2 542 Bank charges: Service Fee 31.07.2009 (10) Cash withdrawal commission 17.08.2009 (30) RTGS Commission 18.08.2009 (25) Service Fee 31.08.2009 (10) Cash withdrawal commission 04.09.2009 (2) Service Fee 30.09.2009 (10) Service Fee 31.10.2009 (10) RTGS Commission 03.11.2009 (10) E-statement charge 03.11.2009 (5) Service Fee 30.11.2009 (10) Bank Statement 01.12.2009 (1) Statement Fee 01.12.2009 (1) Service Fee 31.12.2009 (10) Statement Fee 22.01.2010 (1) RTGS Commission 26.01.2010 (10) Cash withdrawal commission 28.01.2010 (30) Cash withdrawal commission 28.01.2010 (1) Service Fee 31.01.2010 (10) Service Fee 28.02.2010 (10) Statement Fee 10.03.2010 (1) Statement Fee 12.03.2010 (1) Statement Fee 15.03.2010 (1) Statement Fee 16.03.2010 (1) RTGS Commission 17.03.2010 (10) RTGS Book 17.03.2010 (5) RTGS Commission 17.03.2010 (10) Statement Fee 30.03.2010 (1) Service Fee 31.03.2010 (10) --------------Balance as at 31 March 2010 2 306 Represented by: Special fund – European Union Grant 2 306 --------------Balance as at 31 March 2010 2 306 The grant was issued by the European Union with the objective of strengthening the capacity of SAPP in system planning power trade and utility management. This project ran from August 2009 to November 2010. 64
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.5 SAPP United Nations Environment Programme US$ Balance as at 1 April 2010 Advances: Bank date: Advances 23.03.2011 45 000 --------------Balance as at 31 March 2011 45 000 Represented by: Special fund – United Nations Environment Programme 45 000 --------------Balance as at 31 March 2011 45 000 The grant was issued by the United Nations Environment Programme (UNEP) with the objective of capacity building in polychlorinated biphenyls (PCBs) in developing country Parties and Parties with economies in transition within the Southern African Power Pool/ Development Community (SAPP/SADC). This project is expected to run from March to October 2011. 11.6 ZIZABONA Project US$ Balance as at 1 April 2010 13 192 Payments Bank date: Airfares ZIZABONA CTC Project meeting 06.07.2010 (398) Bid Opening for the ZIZABONA Project: Maputo 07.07.2010 (50) Lunch @ Meikles Tender Evaluation 08.07.2010 (180) Lunch @ Meikles Tender Evaluation 09.07.2010 (118) Airfare DBSA SAPP Meeting 12.07.2010 (501) Local Taxis for ZIZABONA meetings 01.08.2010 (79) Groceries for the ZIZABONA meeting 01.08.2010 (236) Local Taxis for ZIZABONA meetings 01.10.2010 (101) Paid back to SAPP CC to clear the debt 31.01.2011 (2 939) Interest received 6 Bank charges (136) Exchange gain 19 Amount posted to debtor account in August 2010 516 --------------Balance as at 31 March 2011 8 995 Represented by: Special fund – ZIZABONA Project 8 995 --------------Balance as at 31 March 2011 8 995 65
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 11. SPECIAL FUNDS (continued) 11.6 ZIZABONA Project (continued) Balance as at 1 April 2009 US$ 24 055 Bank date: Payments Groceries & stationery plus local taxi fares 30.04.2009 (76) Management & Steering committee meetings: Maputo 30.04.2009 (641) Bid opening for the ZIZABONA Project: Maputo 31.05.2009 (351) Airfares LM & MCB to Zambia 28.02.2010 (666) Airfares - Walvis Bay 30.04.2009 (1 946) Airfares plus penalty – Maputo 30.04.2009 (898) Management & Steering committee meetings: Maputo 31.05.2009 (608) Airfares plus taxi fares to Maputo 31.05.2009 (834) (ZESCO & NAMPOWER) meetings in Harare 30.06.2009 (389) Lunch and taxi fare (ZIZABONA Meetings) 31.07.2009 (141) Lawyers meeting 31.08.2009 (1 253) Management committee meetings 31.08.2009 (761) Lawyers meeting Namibia 30.09.2010 (1 728) 3rd ZIZABONA lawyers meeting 31.10.2009 (1 650) Bus hire 01.12.2009 (427) Interest received 28.02.2010 4 Bank charges 31.03.2010 (162) Exchange loss (4) Travel expenses 08.10.2010 1 668 --------------Balance as at 31 March 2010 13 192 Represented by: Special fund – ZIZABONA Project 13 192 --------------Balance as at 31 March 2011 13 192 The power utilities of Zimbabwe, Zambia, Botswana and Namibia expressed interest to enter into an agreement to develop a transmission inter-connector linking these countries. The line will relieve transmission congestion along the central transmission corridor and also offers an alternative transmission route to countries in the South. The project has been code named ZIZABONA. The project is expected to run until 2011. 66
  • FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS: CONTINUED for the year ended 31 March 2011 2011 US$ 2010 US$ 42 800 12 500 51 184 --------------106 484 39 656 9 250 63 758 --------------112 664 12.TRADE AND OTHER PAYABLES Provision for leave pay Provision for audit fees Other payables 13. GOING CONCERN The Directors have assessed the ability of the Organization to continue operating as a going concern and believe that the preparation of these financial statements on a going concern basis is appropriate. 14. EVENTS AFTER THE REPORTING PERIOD As at the date of approval of the financial statements there were no material adjusting or non-adjusting subsequent events. 15. COMMITMENTS AND CONTINGENCIES There were no known commitments and contingencies as at the end of the year. 67
  • THE SAPP GRID 2011 SNEL DRC TANESCO TANZANIA Pk=1081 MW Pk=833 MW 260 MW 400 MW ESCOM MALAWI ZESCO ZAMBIA Pk=267 MW Pk=1600 MW ENE ANGOLA 400 MW Pk=1100 MW 1400 MW 500 MW ZESA ZIMBABWE Pk=2029 MW HCB / EDM MOZAMBIQUE 350 MW 600 MW 250 MW Pk=1500 MW 250 MW BPC BOTSWANA 150 MW Pk=553 MW 1450 MW 1450 MW 650 MW 150 MW 500 MW NAMPOWER NAMIBIA 2000 MW ESKOM SOUTH AFRICA 250 MW Pk=564 MW SEC SWAZILAND Pk=204 MW Pk=36705 MW 230 MW 533 kV DC 275 kV 400 kV 330 kV 68 220 kV 132 kV 110 kV 1450 MW LEC LESOTHO Pk=121 MW Pk -Peak Demand
  • SA PP Co o rd ina tion C e ntr e , ZB Life Towe r s 77 Ja son Moyo Avenue Co rner Sam Nujo ma Street P. O. Box G T 8 9 7 , Harare, Z imb ab w e Te l : + 263 ( 0 ) 4 2 5 0 5 6 0 /2 /3 /4 /9 /9 2 F ax: +2 6 3 ( 0 ) 4 2 5 0 5 6 5 w w w .sap p .co .zw