TEMPORARY power specialist Aggreko has secured a ground-breaking $250 million (£162m) deal to set up a plant supplying both South Africa and Mozambique, helping to plug electricity shortages in both countries.
Glasgow-based Aggreko and its local joint venture partner, Shanduka Group, have signed power purchase deals with South Africa’s Eskom and Electricidade de Mocambique (EDM) to supply electricity from the third quarter of this year to July 2014.
The deal will help both cope with rapidly-rising demand for power as utility companies wait for new power plants to go online. South Africa’s grid nearly collapsed in 2008, forcing the closure of mines that cost the country’s economy billions.
The contracts are also another significant win for Aggreko, whose business is being driven by rising global demand for power. Its international power projects unit, which provides heating and cooling equipment to governments and corporations, posted a 21 per cent rise in revenues during the first quarter of this year.
The company recently opened the fourth service centre in its southern African network, which chief executive Rupert Soames has declared will be a model for the group’s continued growth across the continent.
“This is a very important project for Aggreko, and for southern Africa, as it underlines the benefits of countries working together for the common good,” Soames said yesterday. “We hope it will be a pathfinder for other countries seeking to make the most of their resources to optimise the supply of power across the region.”
Aggreko will build gas interconnections, a substation and a 275 kV transmission line at the Ressano Garcia border between South Africa and Mozambique. Part of the infrastructure will be transferred to EDM at the end of the contract.
The plant will be powered by natural gas from the Temane fields in Mozambique which has been given to the country’s government as a royalty by field operator Sasol.
Aggreko reported a 6 per cent rise in profits to £327m in 2011 despite servicing fewer large one-off events than in the previous year. It spent a record £418m on capital projects, including a new factory in Dumbarton employing 400 people.
The company expects about £50m in revenues from servicing the London Olympics later this year, while other recent customers include utility firms in more than 50 countries. It employs more than 4,500 people from 165 locations.
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