Glasgow firm Aggreko in $250m Southern Africa deal

Aggreko specialises in temporary power and temperature control solutions

Glasgow firm Aggreko has secured a ground-breaking $250m deal to supply power plant to two countries in a joint venture with a South African investment company.

Aggreko and partner Shanduka Group will provide a 107MW plant for utilities in Mozambique and South Africa.

It will be situated on their border, 90km north-west of Maputo.

Aggreko is thought to be the first private firm to supply power cross-border to utilities in Southern Africa.

The joint venture partners have signed a Power Purchase Agreement (PPA) with South African power utility Eskom and agreed PPA terms with Mozambique utility Electricidade de Mocambique (EDM).

Under the terms of the deal, which requires unspecified conditions to be met in advance, the partners will supply baseload and peak power to both companies.

Natural gas

The power plant will be powered by natural gas from the Temane gas fields in Mozambique and its output will be injected into the national grid of Mozambique on site at Ressano Garcia.

The output of the plant will be split between the two companies, with EDM using 15MW and Eskom 92MW.

The plant is expected to start operating early in the third quarter of 2012 and supply power until July 2014.

Aggreko will be responsible for building gas interconnections, a major substation and a transmission line, working alongside the Matola Gas Company SA and Gigawatt Mozambique SA.

Aggreko, which specialises in temporary power and temperature control solutions, said the total value of the project was likely to be about $250m over two years, including fuel costs.

Chief executive Rupert Soames commented: "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.

"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 employs more than 4,500 people operating from 165 locations.

Recent customers include the 2008 Beijing Olympic Games, the Vancouver 2010 Olympic Winter Games and power utilities in more than 50 countries including Angola and Kenya.