Southern African Power Pool 2005 annual report

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Southern African Power Pool 2005 annual report

  1. 1. SAPP SAPP CONTENTS VISION AND OBJECTIVES .................................................................................................................................................................................................................... 2 ORGANOGRAM AND MEMBERS .................................................................................................................................................................................................. 3 ABOUT SAPP ................................................................................................................................................................................................................................................ 4 HIGHLIGHTS OF THE SAPP ACTIVITIES ............................................................................................................................................................................ 5 - 6 SAPP EXECUTIVE COMMITTEE ...................................................................................................................................................................................................... 7 EXECUTIVE COMMITTEE CHAIRMAN’S REPORT .................................................................................................................................................... 8 - 9 REPORT OF THE MANAGEMENT COMMITTEE .................................................................................................................................................... 10 - 12 OPERATING SUB-COMMITTEE REPORT .................................................................................................................................................................... 13 - 17 PLANNING SUB-COMMITTEE REPORT ...................................................................................................................................................................... 18 - 20 ENVIRONMENTAL SUB-COMMITTEE REPORT ...................................................................................................................................................... 21 - 22 SAPP CO-ORDINATION CENTRE REPORT ............................................................................................................................................................ 23 - 26 STATISTICS ........................................................................................................................................................................................................................................ 26 - 31 REPORT OF THE INDEPENDENT AUDITORS .................................................................................................................................................................... 32 STATEMENT OF ACCOUNTING POLICIES .......................................................................................................................................................................... 33 INCOME STATEMENT .......................................................................................................................................................................................................................... 34 BALANCE SHEET .................................................................................................................................................................................................................................... 35 CASH FLOW STATEMENT ................................................................................................................................................................................................................ 36 NOTES TO THE FINANCIAL STATEMENTS ................................................................................................................................................................ 37 - 39 Southern African Power Pool 2005 Annual Report 1
  2. 2. SAPP SAPP SAPP SAPP ORGANOGRAM AND MEMBERS VISION AND OBJECTIVES Vision SADC Directorate of Infrastructure and Services The Southern African Power Pool will: • 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. Executive Committee • Ensure sustainable energy developments through sound economic, environmental and social practices. Objectives The Southern African Power Pool aims to: Management Committee • Provide a forum for the development of a world class, robust, safe, efficient, reliable and stable interconnected electrical system in the southern African region. • Co-ordinate and enforce common regional standards of Quality of Supply; measurement and monitoring of systems Planning Sub-committee performance. • Harmonise relationships between member utilities. Operating Sub-committee Environmental Sub-committee • Facilitate the development of regional expertise through training programmes and research. • Increase power accessibility in rural communities. Co-ordination Centre • Implement strategies in support of sustainable development priorities. 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 OP LEC Lesotho NAMPOWER OP NamPower Namibia Societe Nationale d’Electricite OP SNEL Democratic Republic of Congo Swaziland Electricity Board OP SEB Swaziland Tanzania Electricity Supply Company Ltd NP TANESCO Tanzania ZESCO Limited OP ZESCO Zambia Zimbabwe Electricity Supply Authority OP ZESA Zimbabwe OP = Operating Member 2 Southern African Power Pool 2005 Annual Report Southern NP = Non-Operating Member African Power Pool 2005 Annual Report 3
  3. 3. SAPP SAPP ABOUT SAPP • SAPP was created in August 1995 at the SADC summit held in Kempton Park, South Africa, when member governments of SADC (excluding Mauritius) signed an Inter-Governmental Memorandum of Understanding for the formation of an electricity power pool in the region under the name of the Southern African Power Pool. • SAPP is governed by four agreements: the InterGovernmental 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. Committee which in turn reports to the Executive Committee. • SAPP coordinate the planning and operation of the electric power system among member utilities. • SAPP provide a forum for regional solutions to electric energy problems. • SAPP has established and is operating the Short-Term Energy Market. • SAPP has twelve member countries represented by their respective electric power utilities organised through SADC. • SAPP has three working committees: the Operating Sub-Committee, the Planning Sub-Committee and the Environmental Sub-Committee under a Management SAPP SAPP HIGHLIGHTS OF THE SAPP ACTIVITIES In the year under review, the SAPP worked on the following key areas, solution and way forward for the region’s diminishing generation surplus capacity, SAPP restructuring and documentation review, energy trading and market development, congestion management and operational discipline, and capacity building. 1. Diminishing generation surplus capacity The year saw a much greater interaction between the SAPP Executive Committee and the Honourable Ministers responsible for energy in the Southern African Development Community (SADC) on the solution and way forward to the diminishing generation surplus capacity in the SADC region. From the demand side management, the SAPP has estimated that the current generation reserve surplus capacity will run out after 2007 if SAPP members undertake no new investment in generation.This situation is not desirable for SAPP, as it will have a negative impact on the SADC economies, and will create power shortages that will hinder the progress in rural electrification in member states, and scare away Investors from coming to invest in the SADC region. Much of the rise in the power demand in the region has been partially caused by Increase in the population of most SADC member states, economic expansion in member states requiring more power to supply the new industries, non-economic tariffs in some cases that do not support re-investment in power generation, but allow for large energy intensive users to come into the SADC region and set up their operations, and no significant capital injection into generation projects from either the private or the public sector. A way of marketing and attracting investments into generation and transmission projects as well as the creation of a suitable environment for investment in member countries by addressing regulation and implementation of cost reflective tariffs is therefore necessary for the region. The SAPP held two meetings with the Honourable Ministers responsible for energy in the SADC. The first meeting was held in July 2004 in Windhoek, Namibia, and this was followed up with a second meeting in October 2004 held in Johannesburg, South Africa. At both meetings, the Ministers reaffirmed their commitment to ensure that there is no deficiency in generation surplus capacity in the SADC region. The Ministers committed their governments to work together with the SAPP in addressing the diminishing 4 Southern African Power Pool 2005 Annual Report Southern African Power generation surplus capacity in SADC. Whilst they support the principles of affordable and competitive energy prices, the Ministers agreed to commit to embrace the principle of cost reflective tariffs and to adopt regulatory principles in their respective countries that will enhance those tariffs. The Ministers commended the progress made by SAPP in the implementation of the identified short-term and longterm generation and transmission projects. Most of the short-term generation projects in the region were on course and expected to be completed and commissioned as planned.The SAPP took the necessary steps to secure funding for the short-term projects. On the way forward, the Ministers mandated the SAPP to convene a regional electricity investment conference that will raise funding for the short and long-term generation and transmission projects.The conference is expected to involve a wide range of stakeholders including governments, private sector, and cooperating partners. The venue for the conference was chosen as Windhoek, Namibia, and the agreed date was September 2005 in consultation with other stakeholders. 2. SAPP Restructuring and Documentation Review The tasks of restructuring the SAPP and the revision of the associated documentation were given to the SAPP Management Committee. During the year, the Management Committee came up with a recommendation that has now been approved and accepted by the SAPP Executive Committee for implementation after the Honourable Ministers responsible for energy in SADC have signed the revised Inter-Governmental MOU. In the proposed structure, the Coordination Centre will report to the Coordination Centre Board composed of senior representatives from member utilities. The Coordination Centre Board will in turn report to the Management Committee who will report to the Executive Committee as before. The three subcommittees, Planning, Operating and Environmental remains and will continue to report to the Management Committee. A new sub-committee, called the Markets Sub-Committee, has been proposed. The duties of the Markets Sub-Committee will include the continued development and improvement of the short-term energy market (STEM) and market rule changes, the Pool 2005 Annual Report 5
  4. 4. SAPP SAPP HIGHLIGHTS OF THE SAPP ACTIVITIES development of a competitive electricity market for the SADC region, and the granting of membership to trade, risk management and benchmarking. In terms of documentation review, the revised IGMOU was circulated to Member States and most of them have already endorsed the revised document. Others are doing internal consultation and are expected to approve the revised document. The revised Inter-Utility MOU was completed in April 2005 and was circulated to SAPP members for comments. It is expected that the two documents would be ready for signing in September 2005. 3. Energy Trading and Market Development Energy trading on the STEM continued throughout the year, but with reduced power supply as a result of power rehabilitation projects involving two of the major hydro producers, HCB of Mozambique and ZESCO of Zambia.The two producers had their generators offline for rehabilitation work. A reduction in the supply of power coupled with a steady demand in 2004, resulted in increase in the average price of energy in 2004 compared to 2003. In 2003, the average price of energy was 0.50-USc/kWh and this increase to 0.74-USc/kWh in 2004. Despite an increase in the price of energy in 2004, the actual energy traded was lower due to a shortage of power supply. Only 448-GWh of energy was traded in 2004 compared to 713-GWh in 2003. The development of the competitive electricity market gained momentum in 2004 after receiving financial support from NORAD. Nord Pool Consulting (NPC), the SAPP Consultant on competitive electricity market development, completed the development of the SAPP market simulator and produced an executive summary 6 Southern African Power of the SAPP Spot Market Functional Design Specification. Afterwards, calls for expression of interest followed by request for proposals were advertised.The SAPP is in the process of evaluating the proposals received and is yet to make a final decision. To support the development of the competitive market, the SAPP received financial assistance from Sida for the development of transmission pricing policy, implementation procedures and the development of ancillary services market in the SAPP. This project is expected to come up with a pricing policy suitable for a competitive market and a fully-fledged ancillary services market. 4. System operations and Operational Discipline SAPP experienced a total of nine system disturbances on its network and the main causes of system disturbances were attributed to the shortage of generation and to bush fire.The SADC governments are addressing the shortage of generation in the SAPP collectively. During the year, the SAPP took steps to remedy the occurrence of bush fire and the situation improved. During the year, a meeting on inter-control area operational discipline was held at the Coordination Centre.The purpose of the meeting was to discuss the enforcement of the SAPP Operating Guidelines and its applications, especially in emergency situations. A way of taking the message across to the Operators and Controllers of the SAPP network was also discussed. With the SAPP transfer limits reaching their operating levels, it is important that operational discipline is observed to avoid unnecessary system disturbances. 5. Capacity Building Members of SAPP and the Coordination Centre attended seminars, workshops and conferences, as highlighted in the committee reports, as part of the SAPP initiative to ensure that employees acquire the necessary skills and training to enable them work competitively and efficiently. Each committee of SAPP has been given the responsibility, via the Coordination Centre, to organise training and skills programme for its members. Pool 2005 Annual Report SAPP SAPP SAPP EXECUTIVE COMMITTEE APRIL 2004 TO MARCH 2005 Mr. John Kaluzi BPC Dr.Vicente M.Veloso EDM Dr. Allexon Chiwaya ESCOM Mr. Edward Nelumba ENE Mr.Thulani Gcabashe Eskom Mr. Simon L. Mhaville LEC Dr. Leake Hangala NamPower Mr.Vika di Panzu SNEL Mr. Pius Gumbi SEB Mr. Rudy Huysen TANESCO Mr. Rodnie P. Sisala ZESCO Dr. Sydney Gata ZESA Southern African Power Pool 2005 Annual Report 7
  5. 5. SAPP SAPP EXECUTIVE COMMITTEE CHAIRMAN’S REPORT The Ministers responsible for energy in the SADC region met in July 2004 in Namibia and then again in October 2004 in South Africa at the request of the SAPP to discuss, develop and propose a regional solution and approach to the problem. The Ministers mandated the SAPP to host a regional electricity investment conference with the sole purpose of attracting investments in both generation and transmission.The SAPP Executive Committee has agreed to host the conference in Namibia in September 2005 under the theme: Dr. Leake Hangala Executive Committee Chairman 2004/5 The Southern African Power Pool (SAPP) faced a lot of challenges in the year under review, but also made great advancements in finding the solutions to the challenges facing the region.The major challenges that were faced included: Diminishing generation surplus capacity The SAPP is faced with the challenge of diminishing generation surplus capacity, coupled with new congestion points appearing within utilities as the transmission transfer limits are being reached. In the last ten years, the power demand in the SADC region has been increasing at a rate of about three percent per year. Unfortunately, there has not been a corresponding increment of investment in power generation during the same period. As a result, the generation surplus capacity has been diminishing steadily. The continued diminishing generation surplus capacity would have a negative impact on the economies of the region and potential investors would be frightened.The diminishing generation surplus capacity is largely due to the rise in the power demand in the SADC region partially caused by: • The increase in the population of most SADC member states, • Economic expansion in most member states requiring more power to supply the new industries, • Non-economic tariffs in some cases that do not support re-investment in power generation, but allow for large energy intensive users to come into the SADC region and set up operations, and • No significant capital injection into generation projects from either the private or the public sector. Massive investment in both generation and transmission infrastructure would be required to sustain the projected increase in the power demand in the SADC region. 8 Southern African Power SAPP SAPP EXECUTIVE COMMITTEE CHAIRMAN’S REPORT - CONT. The purpose of revising the Inter-Governmental MOU is to reflect the new structure of the SADC, improve corporate governance of the SAPP and allow the participation of other players in SAPP such as Independent Power Producers and the private sector. Finally, I would like to thank members of the SAPP Executive Committee for their support whilst I was Chairperson of the Executive Committee from April 2003 to April 2005. “Emerging Investment Opportunities for sustainable development in the southern African power sector”. Following the political support from the Ministers responsible for energy in the SADC region, the members of SAPP identified short-term and long-term generation priority projects in their countries and reaffirmed their commitment to the implementation of the projects. It was agreed that SADC should come up with ways of marketing and attracting investments into generation and transmission infrastructure. Whilst the principles of affordable and competitive energy prices were to be recognised, there was need for SADC to embrace the principle of cost reflective tariffs and adopt regulatory principles in their respective countries that will enhance those tariffs. Executive Committee Delegates at a meeting in Lesotho in April 2005. Members of the SAPP responded well to the challenge of diminishing generation surplus capacity by accelerating short-term generation projects. In Angola, 260MW of hydropower was commissioned during the last quarter of 2004, in Tanzania 80MW was commissioned at Ubongo during 2004 and in South Africa; Eskom made 190MW from Camden available towards the end of May 2005. SAPP Pool Plan and Strategic Plan The SAPP has agreed to revise the SAPP Pool Plan of 2001 and to develop a SAPP Strategic Plan. The Pool Plan will provide a detailed regional perspective by addressing the optimisation of regional resources and identification of least cost generation and transmission projects worth promoting for the benefit of the SADC region. The Strategic Plan will give an overview of country priority projects. SAPP restructuring The challenge of restructuring the SAPP continued during 2004. The SAPP completed the revision of the SAPP InterGovernmental MOU and circulated the document to Member States for review and comments. Some Member States have indicated acceptance of the revised document and others are still undertaking internal consultation. At a Ministerial meeting of the Ministers responsible for energy in the SADC region held in October 2004 in South Africa, the Ministers urged the remaining members to expedite the process of internal consultation so that the document could be signed before August 2005. Pool 2005 Annual Report The Norwegian Embassy in Harare is the official representative of NORAD and is funding the development of the SAPP competitive electricity market. Sida is supporting the development of transmission pricing policy, implementation procedures and ancillary services market development. Other Activities SAPP Power Market Project The development of the SAPP competitive electricity market progressed well during 2004. The simulation of the SAPP regional market and the development of the functional and detailed design specifications of the SAPP trading platform were both completed during 2004.What is now remaining is the procurement of hardware and software for the trading platform and implementation of the project. Short-Term Energy Market (STEM) STEM is a firm energy market and was started in April 2001. In April 2005, STEM clocked four years of operation. A record sale of 55-GWh at a cost of USD778,000 was achieved in March 2005.This is the highest recoded monthly sale since the start of the STEM in April 2001. In April 2005, the SAPP Executive Committee unanimously elected Dr. Vicente Veloso, Chief Executive of Electricidade de Mocambique (EdM) of Mozambique, Chairperson of the SAPP Executive Committee. Mr. Simon Mhaville of Lesotho Electricity Corporation (LEC) was elected Vice Chairman. May I take this opportunity to congratulate the two and to wish them well in the running of the SAPP affairs in the coming year. Newly elected SAPP Executive Committee Chairperson, Dr Vicente Veloso, of Mozambique. The SAPP was given a mandate to host a regional electricity investment conference in Namibia in September 2005, and I look forward to a successful conference aimed at attracting investors into generation and transmission projects of the SADC region. Dr. Leake Hangala Chairperson, SAPP Executive Committee Acknowledgements The Executive Committee would like to take this opportunity to thank the donor community and particularly NORAD and Sida for their assistance and support to the SAPP activities. Southern African Power Pool 2005 Annual Report 9
  6. 6. SAPP SAPP REPORT OF THE MANAGEMENT COMMITTEE report to the Management Committee that will in turn report to the Executive committee. Mr. Augusto de Sousa Fernando Management Committee Chairperson (2004/5) In the year under review, the SAPP Management Committee had three responsibilities; formulation of a new management structure for the SAPP, review of the SAPP management and governance documents, and interaction with the SAPP Cooperating Partners. Proposed SAPP Management Structure The SAPP Management Committee unveiled a new management structure for SAPP to the Executive Committee at an Executive Committee meeting held in Malawi in November 2004. In the proposed structure, the Coordination Centre will report to the Coordination Centre Board composed of senior representatives from member utilities. The Coordination Centre Board will in turn report to the Management Committee. The Coordination Centre Board will be responsible for the affairs of the Coordination Centre and will recommend the approval of the Coordination Centre budget to the Management Committee. A new sub-committee, called the Markets Sub-Committee, has been proposed. The duties of the Markets SubCommittee will include the continued development and improvement of the short-term energy market (STEM) and market rule changes, the development of a competitive electricity market for the SADC region, and the granting of membership to trade, risk management and benchmarking. The other three sub committees, Planning, Operating and Environmental remains as before.The three will continue to Documentation Review The Inter-Governmental MOU (IGMOU) was signed in August 1995 and lead to the creation of the SAPP. At the time of creation, national power utilities residing within the SADC region were the only utilities allowed to join the SAPP. Non-national power utilities within the SADC region and national power utilities outside of the SADC were not allowed to join. The governance and membership of the SAPP was derived from the desire for economic co-operation, equitable sharing of resources and support of one another in times of crisis under the SADC protocol.The environment under which the power pool now operates has significantly changed warranting a review of the SAPP governance and membership criteria. The revision of the IGMOU and the Inter-Utility MOU (IUMOU) are expected to address the reforms that have taken place in the SADC organisational structure, the organ to which SAPP reports, power sector reforms and restructuring in member countries and the recognition and admission of new members into the SAPP such as independent power producers residing in the SADC region. The revised IGMOU was circulated to Member States Utilities and they have endorsed the revised document. Subsequently the document was sent to the SADC Secretariat for the SADC Secretariat Legal Counsel to review the revised document and ensure that it is in compliance with the SADC protocols and thereafter the document will be sent to Member States for comments. The SADC Secretariat completed the review and sent the document to Member States in April 2005 with a deadline for submission of comments by the end of May 2005. If the comments from Member States were found to be substantial, then the SADC Secretariat would call a meeting to consider the proposed changes. After the document has been agreed upon by all parties concerned, the Secretariat will call a meeting of the Energy Ministers to have the SAPP SAPP REPORT OF THE MANAGEMENT COMMITTEE - CONT. document signed. The English version of the document will be the main document’s working language. The SADC Secretariat will translate the document into Portuguese and French versions. The revised IUMOU was completed in April 2005 and was circulated to SAPP members for comments. It is expected that the two documents would be ready for signing in September 2005. Interaction with Cooperating Partners At a biannual meeting of the SAPP Management Committee held in Swaziland on 3 September 2004, the Management Committee agreed to send two representatives to the USA to make a presentation on the SAPP activities and to seek for continued financial support from USAID.The Committee also agreed to take the opportunity of the visit to the USA and to have additional meetings with the World Bank and USEA. The two SAPP representatives selected for the purpose were Mr. A de Sousa Fernando, the Management Committee Chairperson, and Dr. Lawrence Musaba, the SAPP Coordination Centre Manager. The two Management Committee representatives held a meeting with USAID on 5 October 2004 in Washington DC. At this meeting, SAPP presented the current and future activities. The aim was to solicit for extended financial support from USAID up to December 2007, when SAPP would be expected to be self-sufficient. Senior officials from USAID, the World Bank, USEA, Nexant, CORE and others attended the meeting.The meeting was organized by USAID at the request of SAPP. At the end of the presentation, SAPP had a closed meeting with USAID at which the way forward was reached and agreed by the two parties. The SAPP held a separate meeting with the World Bank on 6 October 2004. The meeting discussed the SAPP Power Market Project, which is a projected supported by the World Bank, SAPP activities, SAPP interconnectors and the Western Power Corridor project. The World Bank pledged continued financial support to the SAPP priority interconnectors. The SAPP also had a meeting with USEA on 6 October 2004. At this meeting, SAPP thanked USEA for the cooperation that USEA gave to SAPP in the execution of the SAPP-USEA Technical Cooperation Programme that came to an end in June 2004. USEA informed SAPP that a new programme with EDM of Mozambique was going to start once the terms of reference were drawn up, completed and submitted by EDM. SADC Directorate of Infrastructure and Services Executive Committee Management Committee Planning Sub-committee Operating Sub-committee Co-ordination Central Board Environmental Sub-committee Markets Sub-committee Co-ordination Centre Proposed Management structure of the SAPP 10 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 11
  7. 7. SAPP SAPP SAPP SAPP OPERATING SUB-COMMITTEE REPORT REPORT OF THE MANAGEMENT COMMITTEE - CONT. The energy traded in 2004 was lower than in 2003. In 2003, 713-GWh of energy costing USD3.6 million was traded compared to 448-GWh costing USD3.4 million in 2004, see Figure-3. The reduction in the amount of energy traded in 2004 was attributed to the shortage of The seminar was held in Oslo, Norway, from January 24-29 2005. The main objective of the seminar was to illustrate how national initiatives could be integrated into a regional approach in order to improve efficiency for the benefit of all involved parties.The seminar was based on the experiences made from the development of a regional power market in the Nordic countries and the Southern African Region. Dr. Lawrence Musaba, the Coordination Centre Manager and Mr. Augusto Fernando De Sousa, Management Committee Chairperson, represented SAPP.The main topics covered by SAPP were Overview of the Southern African Power System, Institutional Arrangements in the SAPP, Review of Power Trading Options under SAPP, SAPP and Investment - experiences and opportunities, and Review of Experiences and Lessons Learned. 1.3 Energy traded and cost I would also like to take this opportunity and thank the former and outgoing SAPP Management Committee Chairperson, Mr. Bertholdt Mbuere ua Mbuere, for the job well done during his tenure of office. The SAPP achieved a lot under his leadership and I will continue from where he ended. Ms Erica Johnson of Eskom, South Africa supply mentioned in the previous section on supply and Operating Sub-Committee Chairperson (2004/5)) demand. Supply 1 I would also like to congratulate Mr. Peterson Zembani of Malawi for his promotion to the post of Director of Transmission of ESCOM Malawi effective from May 2004. Mr. Zembani is the confirmed ESCOM representative in the SAPP Management Committee. 4000 2001 and clocked four years in April 2005. In the last Demand 4500 The Short-Term Energy Market (STEM) started in April Mr. Bertholdt Mbuere ua Mbuere Former Management Committee Chairperson The Short-Term Energy Market 3500 four years, seven member utilities have been participating in the market and these include BPC, EDM, Eskom, NamPower, SEB, ZESA and ZESCO, and one 3000 Energy in GWh As part of the Norwegian aid to the NILE basin initiative, the Norwegian Water Resources and Energy Directorate (NVE) organized a seminar on regional power trade intended for representatives from the NILE-region involved in the power sector. Independent Power Producer, HCB of Mozambique. 2500 2000 1500 1000 500 1.1 Supply and demand 0 2001 In terms of supply and demand, the supply reduced in 2004 compared to 2003 as a result of power 2002 2003 2004 Fig.1: Energy supply and demand (2001 to 2004) rehabilitation projects involving two of the major hydro 0.80 ZESCO of Zambia.The two hydro producers had their 0.70 generators offline for rehabilitation work. As a result, the power supply on the STEM reduced as shown in Figure1. The power demand on the STEM remained steady Mr. Mr. Peterson Zembani Transmission Director, ESCOM throughout 2004 and was similar to 2003. Average Price [USc/kWh] producers in the SAPP, HCB of Mozambique and 1.2 Average Energy Prices 0.60 0.50 0.40 0.30 0.20 0.10 Some of the delegates who attended the seminar in Norway (Left to Right: Mr. Jean Dieudonne from DRC, Mr.A de Sousa Fernando steady demand in 2004, resulted in increment in the and Dr. L. Musaba from SAPP, and Mr. Gerald Muganga from Uganda) average price of energy on the STEM in 2004 compared 0 2000 A reduction in the supply of power coupled with a 2001 2002 2003 2004 2005 Fig.2: Average Energy Prices in the STEM to 2003 as illustrated in Figure-2. In 2003, the average Acknowledgements I would like to thank members of the Management Committee for electing me as Chairperson of the SAPP Management Committee at a Management Committee Meeting held in Mbabane, Swaziland, in September 2004. A de Sousa Fernando Mr. Augusto de Sousa Fernando SAPP Management Committee Chairperson energy price was 0.50-USc/kWh. In 2004, the average 1.4 STEM Automation price shot to 0.74-USc/kWh, and has been on the The SAPP Coordination Centre performed on line increase since then. STEM trading tests in November 2004. This included online submission of offers and bids, matching, automated result publications, and the generation of 12 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 13
  8. 8. SAPP SAPP SAPP SAPP OPERATING SUB-COMMITTEE REPORT - CONT. OPERATING SUB-COMMITTEE REPORT - CONT. invoices.The system performed well and is expected to Thamaga substations from 132kV to 220kV and the development of the SAPP competitive electricity expression of interest for the development of the be implemented in 2005 after the testing is completed. commissioned two new transformers at Thamaga market in the international press. Two companies market. The two companies, Nord Pool and Enerweb, The aim is to improve STEM trading and reduce human substation, each rated at 125MVA 220/132kV. responded to the call, one from Africa (Enerweb) and then indicated to SAPP that they would submit a joint errors and intervention in the STEM trading process. Completion of the project altered the BPC system the other from Europe (Nord Pool). proposal and that if the proposal is accepted, Nord Pool would be the Lead Contractor and Enerweb would be transfer capability, as the transformers at Thamaga Energy Traded in GWh Cost of Energy in USD'000 formed a parallel path with the ones at Segoditshane via 3500 Afterwards, RFP documents were sent to the two sub-Contractor to Nord Pool.The SAPP is yet to make the 132kV connection between Thamaga and 4000 companies that had responded to the SAPP advert on a final decision on the submitted joint proposal. Gaborone South. Energy and Cost 3000 TABLE-1 2500 Nature of the 2004 System Disturbances on the SAPP Grid 2000 2.2 System Disturbances 1500 No Date Cause of disturbance 1 15 Apr 2004 Eskom Eskom experienced a shortage of generation on the network. 1193 MW of load was shed. The actual load was significantly higher than expected (in excess of 1500 MW), as well as generation load losses of up to 1600 MW. The actual load was significantly higher than expected (in excess of 1500 MW), as well as generation load losses of up to 1600 MW. 2 1 June 2004 Eskom The Juno-Helios 400kV line was switched out of NamPower supply from Eskom was lost; service for planned maintenance. At 08h20, at the time the import was about 142 Hydra-Kronos 400kV line tripped. MW. Not yet known 3 6 Jan 2004 HCB Songo Power Station lost three Bridges. Buscoupler tripped splitting the AC and the DC busbars. Fault on main auxiliary supply system that feeds the HVDC control and monitoring systems. 4 13 Aug 2004 ZESA The Warren-Alaska 330kV feeder no.1 tripped. 60MW The fault current was picked up by all the 330kV transmission lines feeding into and out of Alaska Bulk Supply Points resulting in all of them tripping on distance protection. 9 Sept 2004 ZESA The Warren and Harare Bulk Supply Points blacked out due to delayed fault clearance on Warren-Alaska feeder. 303MW 6 23 Oct 2004 ZESA The Hwange-Insukamini 330kV feeder tripped on distance protection. 427MW 7 21 Feb 2005 ZESA 400/330kV transfer at Insukamini substation tripped. All bilateral and STEM transactions were cancelled. Not yet known 8 26 Fe 2005 ZESA ZESA-BPC interconnector tripped followed by the Sherwood-Alaska and Warren-Norton feeders. Transient lightning and over current. 26 Sept 2004 ZESCO Both the 330kV Leopards Hill- Kariba North lines No.1 and 2 tripped resulting in Kariba North being decoupled from the rest of the ZESCO system but synchronised to ZESA. Fire under the transmission lines caused by peasant farmers preparing their fields. disturbances on its network in 2004 as indicated in Table-1. The main causes of system disturbances in 0 2001 2002 2003 2004 Eskom can be attributed to the shortage of generation in Eskom. Shortage of generation is now a regional Fig.3: Energy traded and cost of energy problem that is being addressed by the SADC 2 Load Lost 9 500 Brief Description 5 1000 The SAPP expressed a total of nine major system Location governments collectively. In the ZESA control area, System Operations system disturbances were caused by bush fire. ZESA 2.1 Changes in SAPP Grid Configuration took steps to remedy the situation and the occurrence • Commissioning of new 330kV transmission lines and of system faults as a result of bush fire were reduced. In substations in Zambia the ZESCO control area, the major disturbance that occurred was attributed to fire under the transmission lines caused by peasant farmers preparing their fields. The new Kansanshi mine, 200km west of Chingola town in the Copperbelt province of Zambia, was energised via a 200km 330kV transmission line from 3 3.1 Markets Development Working Group to increase to 60MW in the years that follow. A new The development of the SAPP competitive electricity 42km 330 kV transmission line from Kafue West to market progressed well in 2004. Nord Pool Consulting Lusaka West with a 330/132kV 125MVA transformer (NPC), the SAPP Consultant on competitive market and a reconfigured 132kV sub transmission network development, completed the development of the SAPP were commissioned during 2004 by ZESCO. market simulator. NPC also produced the executive summary of the SAPP Spot Market Functional Design • New transformers commissioned in Botswana Specification. The national power utility in Botswana, BPC, upgraded In December 2004, the SAPP Coordination Centre the transmission line between Segoditshane and 14 Bush fire Working Group Reports Luano substation. The initial load at the mine is expected to be 40MW in the first year.This is expected Songo-Bindura line remained in service, but power exports increased from 170MW to 260MW. The HVDC power also dropped from 480MW to 240MW. Bush fire Bush fire Phase-to-phase fault. placed an advert for call for expression of interest for Southern African Power Pool 2005 Annual Report Southern African Power 115MW Pool 2005 Annual Report 15
  9. 9. SAPP SAPP OPERATING SUB-COMMITTEE REPORT - CONT. 3.2 Telecommunications Working Group The implementation of the SAPP Operators should be empowered to make decisions and VSAT to release vital information concerning system faults on the November 2004 and to be completed after three SAPP network to all members. OPERATING SUB-COMMITTEE REPORT - CONT. 5 Workshops and Conferences especially in emergencies.They should also be empowered telecommunications project was expected to start in SAPP SAPP months.The project contractors, Emperion, went ahead and ordered the VSAT equipment from the 5.1 SAPP Meetings in Swaziland The SAPP Operating, Planning, Environmental and Management Committee meetings took place in 4 Financial & Technical Cooperation Swaziland from 1- 3 September 2004. manufactures. The equipment for Zimbabwe arrived in Harare in April 2005. The SAPP was expecting 4.1 The Coordination Centre Budget 2004/5 equipment for the other two control centres to be The Coordination Centre Board approved the delivered before June 2005. Coordination Centre budget for 2004/5 fiscal year at USD287,000. At the end of the fiscal year, the actual expenditure incurred by the Coordination Centre was 3.3 Traders and Operators Forum The terms of reference for the formation of the Traders USD360,000. This represented an over expenditure of and Operators Forum were completed and circulated twenty-five percent. The reasons for the over to members in May 2004 by the SAPP Coordination expenditure were accepted as due to increased SAPP Centre. The first Traders and Operators Forum took activities requiring members of the Coordination Centre place in Johannesburg, South Africa, from the 8-9 to travel so often, increased bank charges attributed to November 2004. Traders and Operators from the STEM operations, increase in the cost of goods and different members of SAPP were represented as well as services in Zimbabwe in actual USD terms and salary the SAPP Coordination Centre. At this forum various adjustments for the staff of the Coordination Centre. issues that affect the traders and operators were discussed.These included the objectives of the forum as 5.2 SAPP Meetings in Zimbabwe The 24th SAPP meetings were held in Victoria Falls, Zimbabwe, from 8-11 February 2005. All SAPP members were represented at the meetings. The 4.2 NORAD Support specified in the terms of reference, the Short Term The first annual meeting between SAPP and NORAD, meetings discussed mainly the development of the SAPP Energy Market and trading in the SADC region. Eskom represented by the Royal Norwegian Embassy in Harare, competitive electricity market, development of the made a presentation on the Eskom Multi Market Model. took place in Harare at the SAPP Coordination Centre ancillary services market, diminishing generation surplus Afterwards, the Post STEM Book of Rules and the STEM on 26 May 2004. capacity and many other issues. Operations for the past year were reviewed. Also reviewed were the communication requirements in The SAPP was informed that NORAD has transferred SAPP countries, operational issues and training needs. the responsibility to a follow up of the contract between SAPP and NORAD on "Development of a Competitive 3.4 Operational Discipline Working Group Electricity Market for Southern Africa" to the Royal Representatives from the three control areas (Eskom, ZESA and ZESCO) together with representatives from was to review the SAPP Power Market Project and the Ms Erica Johnson BPC and SNEL met in Harare on 6 August 2004 to discuss NORAD financial support for the coming years. SAPP Chairperson of the Operating Sub-Committee inter control areas operational discipline. After a lengthy had prepared a progress report and made a presentation discussion, the meeting agreed that SAPP operators to update NORAD on the status of the SAPP Power should adhere to the SAPP Operating Guidelines. The Market Project. The progress report and the Working Group also recommended that Controllers and 16 Norwegian Embassy in Harare. The aim of the meeting presentations were well received by NORAD. Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 17
  10. 10. SAPP SAPP PLANNING SUB-COMMITTEE REPORT 2003/4 - CONT. PLANNING SUB-COMMITTEE REPORT 2003/4 It has been noticed that excess generation capacity is running out quite fast due to positive developments in most countries. A comprehensive projects track task was done. During the reporting period 260MW of hydropower was commissioned during the last quarter of 2004 in Angola, 80 MW at Ubongo in Tanzania, 2 x 150 MW generators at Kafue Gorge in Zambia was rehabilitated giving an additional 30 MW capacity. At Kariba North the first generator was upgraded from 150 to 180 MW and 4 x 10 MW machines were re-commissioned at Victoria Falls Power Station and 190 MW is expected to be commissioned at Campden in South Africa. That increases the regional generation capacity by 620 MW. The detailed generation expansion program for short term and long-term utility priority projects are highlighted in Table 3 and 4. Mrs Angela Dava of EDM (Mozambique) Planning Sub-Committee Chairperson 1. Introduction The year 2004/5 was eventful. The following is a summary of some of the activities that took place during the year under review: All utilities recorded a positive growth in electricity demand.The average SAPP demand growth was 3%. The Mozambique Malawi interconnection is now at an advanced stage whereby the line route survey is being carried out. The completion of the SAPP Five Year Strategic Plan. The engagement of a Consultant for the development of a transmission pricing policy, implementation procedures and ancillary services market development through funding from Sida. The major challenge is how to address the diminishing excess generation surplus capacity in the region. It was noted the region would run out of generation capacity by the year 2007, hence is a need to actively promote generation and transmission projects in SAPP. • • • • 2. SAPP Accredited Capacity Obligation and Project Tracking As demand is rising at approximately 3% per annum the Planning Sub Committee is closely monitoring the overall generation reserve capacity in the region. 2004/5 DEMAND GROWTH 30 Percent (%) 25 20 15 10 5 Average Angola Tanzania Zambia South Africa Zambia Total Plant Capanda 1&2 Ubongo Kariba North Campden #6 Kariba North 4. 5. 5.1 WESTCOR The Honourable Energy Ministers from Angola, Botswana, DR Congo, Namibia and South Africa signed an Inter-Governmental MOU on co-operation for the development of the Western Power Corridor project (Westcor) on 22 October 2004 in Johannesburg, South Africa. Transmission Pricing and Ancillary Services Market Development SAPP is in the process of developing an ancillary services market and also reviewing the current transmission pricing policy as SAPP is moving from a cooperative into as competitive pool. A project has been initiated to address these challenges with funding from Sida. The project timeframe is from July 2004 to December 2007. Detailed terms of references were developed and tenders were floated in December 2004 for the engagement of a Consultant for the study. A Consultant has now been appointed who will work closely with SAPP. 5.3 • • The Chief Executives from the five national power utilities from ENE (Angola), BPC (Botswana), SNEL (DR Congo), NamPower (Namibia) and Eskom (South Africa) also signed an Inter-Utility MOU. This will pave the way for the creation of a joint venture company, Westcor. The Westcor Joint Venture Company will be registered in Botswana to fund the engineering and financial studies, and will build, own, and operate the generation, transmission and telecommunications infrastructure should the project prove to be viable. Initially, each utility will contribute USD 100,000 towards the setting up of a project Office in Gaborone. 5.2 • • • MD Sales Growth • Transmission Interconnections The details of the transmission projects at an advanced stage are given below: Table 1. Commissioned Plants 2004/5 3. SAPP Pool Plan Review The Coordination Centre acquired the PSS/E version 30 transmission planning software through funding from NORAD. The World Bank offered to assist SAPP in seeking funding for the review of the Pool Plan Studies. An integrated regional least cost optimal generation and transmission expansion program would be developed. Capacity Commissioning Date 260MW 2004 2 x 40 MW 2004 2 x 30 MW 2004 190 MW 2005 30MW 2005 620 MW ZESA ZESCO TANESCO SEB ESKOM NamPower EDM ESCOM LEC SNELL ENE BPC 0 -5 Country SAPP SAPP DRC – Zambia Terminal equipment upgrade at Luano in Zambia was completed. This would allow for the increase in transfer capacity from 210 MW to 260 MW. Other upgrade works to be done to increase the transfer capacity to 320 MW. The upgrades in the DRC would be funded by the • World Bank while the work in Zambia would be funded by the Copperbelt Energy Corporation (CEC) SNEL negotiated short term and medium term supply agreements with ZESA and ESKOM. Mozambique Malawi The Project Planning Facility Fund (PPF) for Mozambique expired in June 2004. Unfortunately, the project had the same PPF number as another project in Mozambique.The World Bank agreed to process a new number. It was noted that the Environmental Impact Assessment on the Mozambique side was completed There has been a delay on the purchase agreement (PPA) between ESCOM Malawi, the buyer, and the potential seller. The SAPP Coordination Centre was requested to call a meeting and finalize the PPA. It is expected that the World Bank funding would be approved during 2005. 5.4 Zambia - Tanzania - Kenya The economic analysis for the interconnector is still pending and there has been changes in Tanzania that have called for a review of the interconnector studies. The benefits of the Zambia-Tanzania interconnection are to be compared to the just completed East African Power Master Plan. Tanzania has discovered gas deposits and is in the process of constructing CCGT power stations. This cost will now have to be compared with the Zambian hydro supply, which would be non-firm, unless Kafue Lower is constructed and commissioned. The current estimates are that Kafue Lower would land power in Tanzania at a price most likely higher than the Tanzanian gas. 5.5 • • Zambia - Namibia This is a proposed 220 kV line Livingstone in Zambia and Katima Mulilo in Namibia for the transfer of 200 MW. A combination of AC and HVDC light technology is being studied. Graph 1: Utility Peak demand growth 18 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 19
  11. 11. SAPP SAPP SAPP SAPP ENVIRONMENTAL SUB-COMMITTEE REPORT PLANNING SUB-COMMITTEE REPORT 2003/4 - CONT. • • • 6. Techno-economic justification was completed and accepted by African Development Bank. Substation works are in progress with designs completed and earthworks are already underway. The planned commissioning date is May 2006. Technical Issues BPC upgraded the transmission line between Segoditshane and Thamaga substations from 132kV to 220kV and has commissioned two new transformers at Thamaga substation, each rated at 125MVA 220/132kV. Completion of the project alters the BPC system transfer capability, as the transformers at Thamaga will form a parallel path with the ones at Segoditshane via 132kV connection between Thamaga and Gaborone South. In Zambia a new 330kV line was commissioned in November 2004 in order to feed a new mine in Kansanshi, 200km west of Chingola town in the Copperbelt province of Zambia. The line was energized via a 200km 330kV line extension from Luano substation to Kansanshi. DRC-Zambia Interconnector Studies A team of Engineers from CEC, SNEL and ZESCO together with the Coordination Centre met at the SAPP Coordination Centre in Harare to carry out investigations on the transfer capability of the existing DRC-Zambia interconnector to enable SNEL to export additional power down South. An earlier review of the studies was done in April of 2002. The Study Team concluded that the transfer limit of 210 MW from the DRC to Zambia could be increased to 310 MW without reactive power compensation equipment. It was recommended that 310 MW be used as the operational limit of the DRC-Zambia 220 kV line under normal operating conditions. upgrading the 220 kV line in Tanzania was still to be done, whilst that for the proposed Mbeya to Singida 330 kV line was in the preparatory stages.The EIA for the Arusha (Tanzania) to Nairobi (Kenya) 220 kV line was completed. Mr. Lovemore Nyahuma of ZESA Environmental 1.4 Sub-Committee Chairperson (2004/5) Mozambique-Malawi Inter-connector The EIA study and EMP for the Malawian portion of the 220 kV line were completed. Approval of the The momentum that was gathered during the study for the Mozambican portion was still being previous year continued.This witnessed the coverage awaited. Meanwhile, aerial survey was completed and of a lot of ground with some of the notable work was progressing on the resettlement plan. achievements detailed below. 1.5 1. Zambia-Namibia Inter-connector The EIA for the Zambian portion of the 220 kV line SAPP Projects Mrs Angela Dava Chairperson of the Planning Sub-Committee Evaluation of Environmental Impacts of was done in 2000. The EMP has been included into contracts for the construction of the line. The major WESTCOR environmental issues are that the line traverses The timetable for the project’s pre and feasibility through forest reserves and compensation for studies was approved. An environmental committee 1. resettlements. was set up to coordinate the environmental aspects of the abovementioned project, with guidance and 1.6 support from the environmental Sub-Committee. Lower Kafue-Gorge Power Station-750MW The EIA that was conducted in-house was completed. Some of the environmental impacts from the project DRC-Zambia Inter-connector are tree-cutting, noise, erosion, HIV/AIDS, relocation of The Environmental Impact Assessment (EIA) study for 17 fishing families. Some of the mitigatory measures the DRC portion of the line was completed.The 330 included water and power supply to the affected kV line on the Zambian side was commissioned in community, creation of a nature reserve to protect the November 2004 and all environmental issues were 1.2 fragile environment and setting up of a health center. handled according to the Environmental Management Plan (EMP). The Environmental Council of Zambia 2. Working Group Reports 2.1 EIA Guidelines for Hydropower Projects (ECZ) approved the EIA study for the 220 kV line. Major issues related to relocation and compensation. Members of the SAPP Executive Committee pose for a group photo with the Deputy Minister of Energy of Malawi, Hon. B. Khamisa. Terms of reference for the engagement of consultants 1.3 Zambia-Tanzania-Kenya Inter-connector to prepare the guidelines were prepared, discussed The EIA study for the 330 kV line from Zambia to and agreed upon by the ESC. Mbeya in Tanzania was approved. The EIA study for 20 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 21
  12. 12. SAPP SAPP ENVIRONMENTAL SUB-COMMITTEE REPORT - CONT. 2.2 Sustainable Development SAPP SAPP SAPP CO-ORDINATION CENTRE REPORT The working group was reconstituted with a view to explore initiatives contained in the World Summit on Sustainable Development document and come up with a list of those that could be considered. 2.3 Dr. Lawrence Musaba The Coordination Centre Manager Miss Caroline Ganyani IT Specialist Mr. Elisha Mutambudzi STEM Finance Officer Ms. Daisy Mudangwe STEM Finance Officer Mr. Simon Jaricha Messenger There were two training sessions that were held Mr. Alison Chikova Supervisor, System Studies Mrs. Joyce Mutsau Finance and Administration Officer Training Mr. William Balet SAPP Senior Advisor during the course of the year. The first one was on Social Impact Assessment (SIA) followed by the one on Strategic Environmental Assessment (SEA). 2.4 SAPP Position on Climate Change 2.9 Environmental Management of Policy The position paper was awaiting Management Committee approval. 2.5 A new group was constituted to come up with an Environmental Management Policy. Negative Impacts of Climate Change The consultants doing the studies on Improvement of Emission Factors and Vulnerability and Adaptation to Climate Change for hydropower generation in the Mr. Lovemore Nyahuma Zambezi river basin were requested to a presentation Chairman of the Environmental Sub-Committee in order for the ESC to have a better appreciation. 2.6 Guidelines on Management of oil Spills The guidelines were finalized and were to be submitted to the Management Committee for consideration and approval. 2.7 Guidelines Management of Asbestos The guidelines were submitted to the Management Committee for consideration and approval. 2.8 Guidelines on Animal Interactions The guidelines were submitted to the Management Committee for consideration and approval. 22 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 23
  13. 13. SAPP SAPP SAPP CO-ORDINATION CENTRE REPORT - CONT. 1. Introduction During the year under review, the management and operations of the SAPP Coordination Centre were reviewed towards viability and sustainability. The proposed management structure of the SAPP described in the Management Committee report is aimed at enhancing corporate governance in SAPP and at the Coordination Centre. SAPP members through yearly contributions to the Coordination Centre budget fund the activities of the Coordination Centre. Therefore, use of funds in an economic, efficient and effective manner is desirable. The activities of the Coordination Centre in the past year included, but were not limited to STEM operations and management, review of wheeling charges for both bilateral and STEM trading, system studies, competitive market development, and many other activities. 2. Human Resources Miss Caroline Ganyani New SAPP IT Specialist In October 2004 the then SAPP IT Specialist, Mr. Chatwel Ncube, left the Co-ordination Centre and was later replaced by Miss Caroline Ganyani in December 2004. Miss Ganyani joined the SAPP Coordination Centre as an IT Specialist from 1 Januray 2005. Prior to joining the Coordination Centre, she was on attachment with the Coordination Centre from July 2002 to August 2003 as a Student on development. She graduated with BSc(Hons) degree in Information Systems from Midlands State University of Zimbabwe. valuable services and contributions whilst with the Coordination Centre and wish them both the best in their future careers. 3. Conferences and Workshops 3.1 IEEE Annual General Meeting The IEEE Annual General Meeting was held in Denver, USA, from the 6-10 June 2004. Mr. Alison Chikova from the Coordination Centre and Mr. Pat Naidoo of Eskom represented SAPP. A paper on the Development of a competitive electricity market in Southern Africa was presented.The SAPP agreed to a proposal from IEEE to host the general meeting in Southern Africa in July 2005 in Durban, South Africa. 3.2 Power Africa Summit The Power Africa Summit 2004 was held in Johannesburg, South Africa, from 7-10 June 2004 at Vodaworld. Dr L. Musaba and Mr. W. Balet both from the Coordination Centre represented SAPP. The two presented a paper entitled Power Sector Reforms in SAPP Member Countries. Critical issues addressed at this summit included security of supply in competitive and deregulated markets, developments in cross-border power sharing, strategies in effective and accurate demand side management, privatization of power utilities, infrastructure to guarantee the reliable flow of electricity throughout Africa, energy scenarios for Africa, etc. 3.3 Low Cost Power & HIV/AIDS 24 Southern African Power SAPP CO-ORDINATION CENTRE REPORT - CONT. The Low Cost Power & HIV/AIDS Workshop was held in Gaborone, Botswana, from 21-22 June 2004 and was sponsored by USAID. Dr L. Musaba represented SAPP. The Guest Speaker at the Workshop was the Minister of Energy and Mineral Development, Mrs Syda N. M. Bhuma (MP), from the Republic of Uganda. In her speech, she stated that HIV/AIDS is now a global calamity and constitutes one of the most formidable challenges to development and social progress. The disease was eroding decades of development gains and undermining economies of many nations. On top of the suffering it imposes on individuals and their families, the epidemic was profoundly affecting the social and economic fabric of society. 3.4 Meeting on Databank of the African Power Sector A coordination meeting was held in Abidjan on the data bank project of the African Power Sector under the patronage of the African Energy Commission.The objective was to set up a common data bank for power utilities in Africa covering general, technical, commercial, and socio-economic, data on power exchanges, new interconnections and others. The meeting was organised by UPDEA and attended by representatives of power pools in Africa. Mr. Alison Chikova who is in charge of system studies at the Coordination Centre represented SAPP. 3.5 Renewable Energy and Energy Efficiency Workshop Mr. Alison Chikova, SAPP System Studies Supervisor, attended a workshop on renewable energy technologies, energy efficiency and demand side management sponsored by IT Power of the UK, from 18-21 October 2004. 3.6 RERA Workshop and Annual General Meeting The Regional Electricity Regulatory Association (RERA) held their Workshop and Annual General Meeting in Lusaka, Zambia, from 26-29 October 2004. SAPP was invited to present a paper on Investments in the SADC Electricity Industry: Issues and Challenges. In June 2004, Mr. Simon Jaricha was recruited as the new Messenger for the Coordination Centre. He took over from Mr. Misheck Tembo who left the Coordination Centre when his contract expired at the end of May 2004. Mr. Tembo worked for the Coordination Centre for four years from May 2000 to May 2004. The Coordination Centre would like to thank both Mr. Chatwel Ncube and Mr. Misheck Tembo for their SAPP SAPP Participants to the Low Cost Power and HIV/AIDS Workshop in Botswana, June 2004. Pool 2005 Annual Report Dr. L. Musaba, the SAPP Coordination Centre Manager, presented the paper. Country Representatives presented the updates on reforms in the energy sector highlighting Policies, Laws and Wills of Governments. The Country Representatives also Southern African Power gave updates on Current Developments in the Energy sector in their countries. RERA confirmed that there are now six countries in the SADC region that have a regulator as shown in the Table below. TABLE ON SADC REGULATORS Country Name of Regulator 1 Lesotho Lesotho Electricity Authority 2 Malawi National Electricity Council 3 Namibia Electricity Control Board 4 South Africa National Electricity Regulator 5 Zambia Energy Regulation Board 6 Zimbabwe Zimbabwe Electricity Regulatory Commission 3.7 Pan African Power Congress 2005 The Pan African Power Congress took place from 1822 April 2005 in Johannesburg, South Africa. Dr L. Musaba from the Coordination Centre represented SAPP. The conference brought together people from Africa involved in the power generation industry, such as key decision makers, regulators, buyers and sellers. Members of the SAPP took part in the conference and presented papers and participated in panel discussions. 4. Acknowledgement I would like to thank the Chairperson and members of the Coordination Centre Board for extending my contract for another three years from October 2004 and thus giving me another opportunity to run the Coordination Centre. May I also take this opportunity and thank Dr. Leake Hangala, the outgoing Chairperson of the SAPP Executive Committee, for his visionary leadership and for the encouragement he gave to me in the past year. SAPP was privileged to have such a leader at a time as this. Lastly, I would also like to thank all Coordination Centre employees for the tremendous support I received from them and for the dedication they displayed throughout the year. Dr. Lawrence Musaba SAPP Coordination Centre Manager Pool 2005 Annual Report 25
  14. 14. SAPP SAPP SAPP SAPP STATISTICS - CONT. STATISTICS Number of Customers per Employee2004/5 POTENTIAL NEW GENERATION PROJECTS IN SAPP - Table 1: Short Term Generation Projects in SAPP Countries 150 No. Country Project Name 1 2 3 4 5 6 7 Angola Botswana DRC Lesotho Malawi Namibia South Africa 8 Swaziland 9 Tanzania 10 Zambia 11 125 Zimbabwe Capanda Morupule Expansion Refurbish Inga-1 & 2 Muela Phase-2 Kaphichira Phase-2 Kudu Mothballed Plants Open Cycle Gas Turbine Open Cycle Gas Turbine Maguga Ubungo Ubungo Kinyerezi Kinyerezi Refurbishment Itezhi-Tezhi Kafue Lower Kariba North Kariba South Hwange 7 & 8 Lupani Western Power Station TOTAL Capacity [MW] Type 260 240 500 110 64 800 3,500 1050 1050 20 40 40 60 80 210 120 600 360 300 660 300 1200 11,564 Hydro Coal Hydro Hydro Hydro Gas Coal Gas Gas Hydro Gas Gas Gas Gas Hydro Hydro Hydro Hydro Hydro Thermal Gas Coal Expected Commissioning Year 2007 2009 2007 2010 2009 2009 2005 to 2010 2007 2008 2007 2005 2005 2007 2009 2006 2007 2009 2009 2007 2008 2009 2008 Capacity [MW] Type Expected Year 260 3,600 3,500 6,000 230 240 260 100 1,300 1,000 40 360 23 4,000 2,500 1,500 2,330 1,000 358 200 200 222 200 220 800 1,300 31,743 Hydro Thermal Hydro Hydro Hydro Hydro Hydro Hydro Hydro Coal Hydro Hydro Hydro Coal Coal Gas Hydro Thermal Hydro Coal Coal Hydro Hydro Hydro Hydro Coal 2011 2015 2010 2012 100 75 50 25 ZESA ZESCO TANESCO SEB ESKOM NamPower EDM ESCOM LEC SNELL BPC ENE 0 PERFORMANCE ANALYSIS 2004/5 12 10 8 6 4 2 MW/Employee (x10) ZESA ZESCO TANESCO SEB ESKOM NamPower EDM ESCOM LEC SNELL BPC ENE 0 Table 2: Long Term Generation Projects in SAPP Countries GWh /Employee No. Utility ENE BPC SNEL LEC ESCOM EDM NamPower ESKOM SEB TANESCO ZESCO ZESA 26 Southern African Power Pool 2005 Annual Lesotho Malawi 6 Mozambique 7 Namibia 8 South Africa 9 Swaziland 10 Tanzania 11 Zambia 12 Report Angola Botswana DRC 4 5 (Peak Demand) (Energy Sent Out) Number of MW/Employee GWh/Employee Customers per Employee 0.119 0.745 35 0.19 0.445 64 0.161 1.101 57 0.197 0.939 92 0.095 0.49 56 0.084 0.032 89 0.468 1.644 4 1.109 7.264 121 0.257 0.155 73 0.105 0.756 113 0.348 2.289 89 0.349 1.64 88 Project Name 1 2 3 Table 2. Key Statistics 2004/5 Country Zimbabwe Cambambe II Mmamabula Inga-3 Grand Inga Phase-1 Musanga Kholombizo Mpatamanga Fufu Mepanda Uncua Moatize Massingir Epupa Popa Greenfield Greenfield 2xCGT 2xPumped Storage Lubombo Ruhudji Mchuchuma Mchuchuma Rumakali Expansion Kariba North Kalungwishi Batoka Gokwe North TOTAL Southern African Power Pool 2005 Annual Report 2018 2020 2012 2010 2014 2015 2015 2013 Beyond 2010 2016 2022 2024 2027 2020 2014-2015 2014 2020 27
  15. 15. SAPP SAPP SAPP SAPP STATISTICS - CONT. STATISTICS - CONT. Table 3: UTILITY GENERAL INFORMATION Table 4: ANNUAL MAXIMUM DEMAND, MW - APRIL 2004 TO MARCH 2005 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ANGOLA 209 326 250 291 330 342 374 468 846 871 898 924 952 981 1010 BOTSWANA 239 256 285 337 362 393 402 426 452 479 507 534 562 591 609 DRC 830 841 895 929 991 994 1012 1,063 1,070 1,100 1,138 1,172 1,207 1,244 1281 YEAR Country Utility Installed Maximum MD Capacity Demand Growth Sales Sales Growth Number of Number of Generation Customers Employees Sent Out Net Imports GWh GWh Net Transmission Exports System losses GWh % Revenue Debtor Rate of Net US$ Days Return Income Million USD % Million MW MW % GWh % 16 1,636 6.1 110,801 3,148 2,344 17.5 - 25 47.16 49 n/a -24.73 2 2420.7 2.3 136,398 2,118 941.7 1,864.20 - 11.7 134.4 44 1.4 32 - 1,800.00 6.3 149.2 n/a n/a n/a 19.2 45 -1 -0.97 1 2.218 Angola ENE 624 374 Botswana BPC 132 402 SNEL 2,442 1012 2.53 4,656 13 360,329 6,268 6,904 LEC 72 90 1 311 -3 42,173 456 428 8 39 22 ESCOM 285 227 7 970 4 135,000 2,400 1,177 N/A N/A 19 5.319 110 EDM 177 266 3.1 1,452 5 284,562 3,185 102.2 1,773 1,496 20 102.7 NamPower 461 393 24.3 2,795 24.4 3,261 839 1,379 1,566.0 - 8 DRC Lesotho Malawi Mozambique Namibia South Africa Swaziland ESKOM 42,011 32,082 1 196,980 4.8 3,505,039 28,938 210,218 8,194 9,977 58 LESOTHO 69 77 85 88 89 90 90 107 115 125 130 136 142 148 152 MALAWI 190 185 205 212 236 261 227 294 311 330 350 371 394 414 426 MOZAMBIQUE 245 214 231 234 250 258 266 285 305 326 349 373 399 427 440 NAMIBIA 292 314 320 335 362 371 393 596 670 681 692 703 713 724 746 SOUTH AFRICA 27,803 27,813 29,188 30,599 31,621 30,154 32,082 33,245 34,907 35,954 37,032 38,144 39,288 40,467 41681 SWAZILAND 145 153 154 159 160 172 171.5 180 185 191 196 202 208 215 221 368 394 426 465 474 506 509 606 654 700 747 786 873 910 937 3.2 4.8 TANZANIA 159 34 0.92 10 ZAMBIA 1,126 1,069 1,085 1,087 1,118 1,255 1,294 1,350 1,374 1,399 1,426 1,499 1,529 1,560 1606 8.3 4,782.00 27 10.58 487 ZIMBABWE 1,950 2,034 1,986 2,013 2,028 2,007 2,069 2,119 2,208 2,287 2,363 2,446 2,527 2,610 2688 TOTAL INTERCONNECTED 32,699 32,771 34,229 35,781 36,981 35,694 37,780 39,371 41,286 42,542 43,832 45,208 46,575 47,986 49,425 SEB 51 171.5 1 852.8 2.5 48,500 667 103.5 916.8 - 16 59.7 85 4.5 5.1 Tanzania TANESCO 839 509 5.9 2,549 10.3 550,863 4857 3674 43 - 24 188 92 n/a n/a Zambia ZESCO 1,672 1,294 6.4 8,201 4.4 332,000 3,719 8,512 - 231 3.7 ZESA 1,975 2,069 3.1 10,117 -4.21 522,427 5,925 9,719 1,993 255.5 13.6 Zimbabwe FORECAST HISTORIC APRIL 2004 TO MARCH 2005 154.08 172 200.4 0.4 3.682 TOTAL SAPP 33,466 33,676 35,110 36,749 38,021 36,803 38,890 40,739 43,097 44,443 45,827 47,289 48,794 50,291 51,799 52 -1.81 -389.2 Table 5: ANNUAL ENEGY SENT OUT, GWh - APRIL 2004 TO MARCH 2005 HISTORIC FORECAST YEAR 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ANGOLA 1,319 1,516 1,104 1,840 1,866 1,993 2,344 2,675 2,870 3,090 3,320 3,665 3,820 3,935 3,935 BOTSWANA 1,543 1,645 1,880 2,043 2,150 2,282 941.7 2,564 2,717 2,880 3,054 3,237 3,431 3,637 3,637 N/A N/A N/A N/A 5,907 6,084 6,904 6,455 6,648 6,848 7,053 7,264 7,482 7,707 7,707 DRC LESOTHO 271 267 427 393 378 429 428 461 490 512 528 554 576 600 600 MALAWI 1,023 1,087 902 1,091 1,134 1,177 1,177 1,276 1,327 1,380 1,435 1,492 1,552 1,614 1,614 MOZAMBIQUE 1,076 1,186 1,212 1,257 1,307 1,392 102.2 109 117 125 134 143 153 164 176 NAMIBIA 1,881 1,676 1,978 2,016 2136 1,421 1,379 4,038 4,400 4,456 4,512 4,567 4,623 4,679 4,679 SOUTH AFRICA 185,583 188,475 194,601 198,790 207,233 210,112 210,218 228,505 234,555 240,377 251,834 256,013 261,458 267,955 267,955 SWAZILAND 718 760 820 847 765 991 103.5 951 979 1,008 1,039 1,070 1,102 1,135 1,135 TANZANIA 2,096 2,240 2,394 2,654 2,708 3,052 3674 3,334 3,556 3,782 4,025 4,238 4,820 5,021 5,021 ZAMBIA 7,868 7,656 7,798 8,152 8,308 8,466 8,512 8,408 8,974 9,209 9,373 9,542 9,728 10,224 10,224 11,529 12,811 12,090 11,972 8,587 8,799 9,719 12,606 12,937 13,349 13,800 14,295 14,777 15,271 15,779 ZIMBABWE TOTAL INTERCONNECTED 210,469 214,476 220,806 225,470 236,771 239,976 238,307 264,097 271,817 278,765 291,327 296,685 303,331 311,372 311,892 TOTAL SAPP 28 Southern African Power Pool 2005 Annual Report 214,907 219,319 225,206 231,055 242,479 246,198 245,502 271,382 279,570 287,017 300,107 306,080 313,523 321,942 322,462 Southern African Power Pool 2005 Annual Report 29
  16. 16. SAPP SAPP REPORT OF THE INDEPENDENT AUDITORS We have audited the annual financial statements set out on pages 3 to 9 for the year ended 31 March 2005. SAPP SAPP STATEMENT OF ACCOUNTING POLICIES The following principal accounting policies have been maintained in a separate bank account and any interest consistently applied throughout the period: earned on the unused funds is credited to the Special Fund. ACCOUNTING CONVENTION PROVISIONS The financial statements are prepared under the historical Provisions are recognised when the Organisation has a cost convention. No procedures are adopted to reflect the present obligation (legal or constructive) as a result of a past impact on the financial statements of specific price changes or event, it is probable that an outflow of resources embodying changes in the general level of prices. economic benefits will be required to settle the obligation Respective responsibilities of the executive committee and auditors The financial statements are the responsibility of the executive committee of the organisation. Our responsibility is to express an opinion on these financial statements based on our audit. Scope We conducted our audit in accordance with approved International Standards on Auditing. Those standards require that we and a reliable estimate can be made of the amounts of the obligation. plan and perform the audit to obtain reasonable assurance that the financial statements are free of material misstatement. An CURRENCY audit includes: The financial statements are expressed in United States dollars. Assets and liabilities are translated to the relevant • assessing the accounting principles used and significant estimates made by management, and • evaluating the overall financial statement presentation. Retirement benefits are provided for the organisation employees through the National Social Security Authority ruling average monthly rates for the period to which they examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, currencies at the exchange rate ruling on the balance sheet date, income and expenditure items are translated at the • RETIREMENT BENEFIT COSTS (NSSA) scheme. relate. Realised exchange differences are taken to the income statement in the year in which they arise. Surpluses Employer's contributions to the NSSA scheme are charged Audit opinion and deficits on translation are dealt with in the income to the income statement when due. In our opinion, the financial statements, in all material respects, give a true and fair view, of the financial position of the statement in the determination of net income. REVENUE RECOGNITION organisation at 31 March 2005 and of the results of its operations and cash flows for the year then ended in conformity with DEPRECIATION Funds Income Fixed assets are depreciated over their expected useful lives Income received is based on a set budget agreed upon by all on a straight line basis as follows:- International Financial Reporting Standards. members of the organisation and contributions made by members are based on set percentages and proportions Computer equipment - 3 years based on electricity usage. The income is brought to account Office equipment - 5 years per issued invoice to each of the member countries. Office furniture and fittings CHARTERED ACCOUNTANTS (ZIMBABWE) - 10 years HARARE Interest The carrying amounts of fixed assets are reviewed at each 11 July 2005 Revenue is recognised as the interest accrues. balance sheet date to assess whether they are recorded in excess of their receivable amounts and where carrying values exceed this estimated recoverable amount, assets are written down to their recoverable amount. SPECIAL FUND Funds granted for specific purposes are not included in the income and expenditure account, but are accounted for separately as Special Fund on the balance sheet. They are 30 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 31
  17. 17. SAPP SAPP SAPP SAPP BALANCE SHEET INCOME STATEMENT 31 MARCH 2005 Notes 2005 US$ 31 MARCH 2005 2004 US$ INCOME Notes 2005 US$ 2004 US$ FUNDS Accumulated funds Special fund - Norad Grant General reserve 3 4 231 571 72 805 75 000 275 073 543 716 50 000 CURRENT LIABILITIES Accounts payable TOTAL LIABILITIES 5 139 470 _________ 518 846 _________ 20 362 _________ 889 151 _________ 6 29 213 40 220 7 148 225 52 964 268 603 72 805 _________ 518 846 _________ 252 251 543 716 _________ 889 151 _________ FUNDS AND LIABILITIES OPERATING INCOME Operating members Imported energy Peak demand Thermal rating Host member Short Term Energy Market Non-member participation fees 69 000 69 000 46 000 23 000 23 000 51 482 30 000 _________ 311 482 _________ 75 000 75 000 50 000 25 000 25 000 42 108 _________ 292 108 _________ ASSETS OTHER INCOME/EXPENSES Special fund - Telecoms Project Sundry income Foreign exchange loss Foreign exchange difference on fixed assets Interest received 392 409 6 980 (2 013) 9 856 237 _________ 718 951 _________ Profit on disposal of fixed assets (2 646) (10 699) 16 077 _________ 294 840 _________ EXPENDITURE Westcor Project expenses Administration expenses 2 737 453 _________ 3 (18 502) _________ 77 965 _________ CURRENT ASSETS Accounts receivable Cash at bank and on hand - Co-ordination centre funds - Special fund - Norad Grant TOTAL ASSETS 1 738 215 137 _________ (DEFICIT)/SURPLUS FOR THE YEAR TRANSFERRED TO ACCUMULATED FUND NON-CURRENT ASSETS Property, plant and equipment E JOHNSON CO-ORDINATION CENTRE BOARD CHAIRPERSON L MUSABA CO-ORDINATION CENTRE MANAGER 11 July 2005 SOUTHERN AFRICAN POWER POOL 32 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 33
  18. 18. SAPP SAPP SAPP SAPP NOTES TO THE FINANCIAL STATEMENTS CASH FLOW STATEMENT 31 MARCH 2005 31 MARCH 2005 Note 2005 US$ 2004 US$ 1 11 329 65 377 9 856 (319) 16 077 (210) 2005 US$ 828 RETURNS ON INVESTMENTS Interest received Interest paid INVESTING ACTIVITIES Capital expenditure Disposal of fixed assets Disposal of investment (4 751) 237 - (470 911) _________ FINANCING ACTIVITIES Grants received Grants utilised/remitted (DECREASE)/INCREASE IN CASH RESOURCES 543 716 _________ (454 559) _________ 656 546 _________ (18 502) 15 758 (9 856) 319 (95 261) 41 362 77 746 (237) _________ 11 329 _________ 77 965 19 873 10 699 (16 077) 210 (27 874) 2 876 (2 295) _________ 65 377 _________ 795 967 341 408 _________ (454 559) _________ 2 (10 602) 42 188 139 421 795 967 _________ 656 546 _________ NOTES TO THE CASH FLOW STATEMENT 1 2 34 NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES This is arrived at as follows: (Deficit)/surplus for the year Depreciation Exchange difference on fixed assets Interest receivable Interest payable (Increase) in accounts receivable Increase in provisions (Decrease)/increase in accounts payable Profit on sale of fixed assets (DECREASE)/INCREASE IN CASH RESOURCES The (decrease)/increase in cash resources is represented by a movement in balances, as follows: At 1 April 2004 At 31 March 2005 Southern African Power Pool 2005 Annual Report ADMINISTRATION Cleaning Audit fee - current year annual audit - prior year charge - STEM review Advertising and promotions Bank charges Computer expenses Consultancy Courier and postage Depreciation Entertainment Insurance Interest paid Magazines and books Printing and stationery Recruitment and relocation Rent paid Repairs and maintenance Salaries and wages Staff expenses Staff training Subscriptions Sundry expenses Telephone and fax Internet Travel and accommodation Withholding tax on interest Reports and periodicals Telecommunications - VSAT Project TOTAL ADMINISTRATION EXPENSES 1 843 541 7 590 1 811 2 500 2 778 19 873 237 953 210 50 2 257 383 4 488 346 105 664 169 2 924 102 1 514 2 861 2 729 25 268 1 239 9 650 17 139 _________ 215 137 _________ ACTIVITIES The main object of the organisation is to co-ordinate the planning and development of electricity inter-connections between members' respective networks and to expand the Interconnected Power System and electricity trading in the region. 2 18 8 788 2 430 2 944 438 14 693 3 086 6 602 15 758 379 2 477 319 50 2 211 656 12 500 1 198 194 862 292 1 737 405 2 387 7 519 6 092 45 223 5 7 446 396 128 _________ 737 453 _________ 1 NET CASH INFLOW FROM OPERATING ACTIVITIES 2004 US$ Southern African Power Pool 2005 Annual Report 35
  19. 19. SAPP SAPP SAPP SAPP NOTES TO THE FINANCIAL STATEMENTS - CONT. NOTES TO THE FINANCIAL STATEMENTS - CONT. 31 MARCH 2005 31 MARCH 2005 2005 US$ 3 4 275 073 (18 502) (25 000) _________ 231 571 _________ ACCUMULATED FUND At 1 April 2004 (Deficit)/surplus for the year Transfer to General Reserve At 31 March 2005 2004 US$ 2005 US$ 222 108 77 965 (25 000) _________ 275 073 _________ 5 SPECIAL FUND - NORAD GRANT Balance as at 1 April 2004 543 716 Additional advance 04.10.04 297 937 Payments: (769 612) Nordpool Consulting Nordpool Consulting Nordpool Consulting Nordpool Consulting Nordpool Consulting Nordpool Consulting Shaw Technologies Incorporation (Planning Software) Nordpool Consulting Nordpool Consulting Nordpool Consulting Nordpool Consulting Nordpool Consulting Nordpool Consulting Nordpool Consulting Norwegian Water Resources 21.04.04 28.05.04 08.06.04 07.07.04 06.08.04 09.09.04 29.10.04 04.10.04 22.11.04 20.12.04 04.01.05 07.02.05 02.03.05 24.03.05 17.11.04 (75 465) (63 848) (65 500) (64 187) (62 200) (61 307) (69 250) (61 307) (63 228) (52 007) (35 303) (35 303) (35 303) (17 069) ( 8 337) Bank charges 6 6.1 2004 US$ 22 215 30 872 86 383 _________ 139 470 _________ 11 725 8 637 _________ 20 362 _________ PROPERTY, PLANT AND EQUIPMENT Summary Computer equipment Cost Aggregate depreciation Net book value 45 091 36 992 _________ 8 099 _________ 54 842 42 427 _________ 12 415 _________ Office equipment Cost Aggregate depreciation Net book value 20 000 18 245 _________ 1 755 _________ 20 000 14 273 _________ 5 727 _________ 35 422 16 063 _________ 19 359 _________ 34 536 12 458 _________ 22 078 _________ 100 513 71 300 _________ 29 213 _________ 109 378 69 158 _________ 40 220 _________ ACCOUNTS PAYABLE Provisions United States Agency for International Development (USAID) Other creditors Office furniture and fittings Cost Aggregate depreciation Net book value Total Cost Aggregate depreciation Net book value (477) Interest received Balance as at 31 March 2005 1 241 _________ 72 805 _________ The goal of the project funded by Norad 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. The project is expected to run until 2007. 36 Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 37
  20. 20. SAPP SAPP SAPP SAPP NOTES NOTES TO THE FINANCIAL STATEMENTS - CONT. 31 MARCH 2005 2005 US$ 6.2 40 220 _________ Net book value of total property, plant and equipment at 31 March 2005 10 658 3 741 5 474 _________ 19 873 _________ 29 213 _________ 40 220 _________ 132 164 14 371 1 690 _________ 148 225 _________ Depreciation charge Computer equipment Office equipment Furniture 7 699 93 2 810 _________ 10 602 _________ (10 699) _________ 8 182 3 971 3 605 _________ 15 758 _________ Foreign exchange difference 60 190 _________ 3 866 885 _________ 4 751 _________ _________ Movements for the year Net book value of total property, plant and equipment at 1 April 2004 Capital expenditure - at cost Computer equipment Office equipment Office furniture and fittings 2004 US$ 39 581 7 943 4 542 898 _________ 52 964 _________ The foreign exchange difference arose from conversion of the fixed assets bought over the years from Zimbabwe dollars to United States dollars, due to different exchange rates at the date of acquisition of each asset and the balance sheet date. 7 38 ACCOUNTS RECEIVABLE Trade debtors United States Agency for International Development (USAID) Prepayments Other debtors Southern African Power Pool 2005 Annual Report Southern African Power Pool 2005 Annual Report 39
  21. 21. SAPP SAPP NOTES 40 Southern African Power Pool 2005 Annual Report

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