Sections
DONATE
SUPPORT WWW.JOLLOFNEWS.COM
Account Login
Senegal pays $75 mln to bridge power gap: document
Friday, 06 May 2011 11:25
(Reuters) - Senegal is paying $75 million to rent power from a U.S. energy firm to help it end electricity cuts that have
triggered street protests and are weighing on economic growth, according to document seen by Reuters.Years of poor management and misdirected investment has left the West African country with one of the world's most costly and inefficient power sectors, based on diesel-run generators.
With the local utility Senelec close to bankruptcy and struggling to pay its fuel bills, load-shedding has led to power cuts of up to 30 hours a time, sparking anger at President Abdoulaye Wade's government ahead of a February 2012 election.
Wade is seeking to alleviate the problem by renting 150 Megawatts of additional capacity from U.S.-based APR Energy LLC. A summary of the contract obtained by Reuters showed the first additional capacity should be in place within two months.
"The total cost of the project, including the purchase of equipment which are due to be transferred to Senelec, amounts to 36.25 billion CFA francs," according to the contract summary.
The first 20 MW is due within 60 days of the contract entering into force, with the full 150 MW operational within 167 days -- a timetable which if respected means the extra power would be fully in place full just weeks before the election.
Jacksonville-based APR Energy issued a statement confirming that it had been awarded a contract to supply a total 150 MW of capacity but declined comment on the value of the contract or the target dates for completion.
Local officials estimate the crisis is costing the country about two percentage points of growth a year -- about half the overall rate predicted for 2011. The International Monetary Fund warned after a visit last month that "persistent electricity supply problems" remained a downside risk to the economy.
Investors are watching to see whether Wade can solve the power problem as a guage of his chances of re-election and ahead of plans by Senegal to launch a $500 million Eurobond to replace the $200 million bond launched in 2009.
Senegal's installed 477 MW of capacity would just about allow it to cover the country's energy needs if all of it was working. Yet the aid-reliant state at present can only afford to keep 70 percent up and running at any one time.
Even retailing electricity at 115 CFA francs (24 U.S. cents) a kilowatt-hour -- double the price in more affluent Morocco but still below cost -- Senelec has amassed 286 billion CFA of debt which means it can neither maintain its plants nor buy fuel. Longer term, Senegal wants to switch to coal power.
Written by Diadie Ba
Jollofnews Poll
Who do you think should be the next President of The Gambia?
Follow us on Twitter
-
Anti-cuts protest at Clegg's homeHundreds of anti-cuts protesters gather outside Deputy Prime Minister Nick Clegg's home in south-west London.
-
Egypt candidate to seek election suspension: lawyerCAIRO (Reuters) - Leftist candidate Hamdeen Sabahy will file an appeal for Egypt's presidential election...
-
Bristol Rovers Speed Merchant Could Be Racing To Posh(GamSports) – Peterborough United are thought to be one of a number of Championship sides...