Growth in electricity demand has prompted the government to issue a Rd 6 billion ($1.03 billion) tender to the private sector for two new generation plants, according to the Minerals and Energy Department of South Africa. An unexpected more than 7% rise in peak demand will see pre-qualified private sector companies bid for the exclusive right to build, own and operate the new plants, expected to be fully operational by the end of 2008. The two 500 MW, oil-fired, open cycle turbines will operate as peaking plants and will form part of a 20 year Integrated Resource Plan, which predicts that over 2,500 MW of new peaking capacity will be required by 2006 – 2010. With the government keen to stress that the move is not a precursor to privatisation of the giant Eskom, the company also recently unveiled it’s investment programme for new generation that will see some Rd 200 billion ($34.5 billion) spent over the next 25 years. In October, a Rd 107 billion ($18.5 million) investment programme was announced of which Eskom will spend at least Rd 84 billion ($14.5 million) over the next 5 years, the bulk on generation. The government has, meanwhile, shelved plans to sell 30% of Eskom’s generation division valued at well over Rd 100 billion ($17.25 million). Eskom has developed a two phase power strategy in which the first phase will require the addition of 1,000 MW per year from 2005 to 2009 to avoid shortages during peak usage time.

Eskom is expected to make decisions on a number of projects within the next year. These include plans to finalise the 1,300 MW, Rd 5.3 billion ($913 million) Braamhoek pumped-storage scheme, near Harrismith, by 2012 and a second pumped-storage scheme planned for 2014 at Steelport in Mpumalanga, which would cost Rd 5 billion ($862 million) and produce about 1,000 MW. Another 1,500 MW CCGT at Rd 9 billion ($1.55 billion), possibly near Coega in the Eastern Cape, is to be operational by 2013 and adding three power units to the six already operating at the Mathimba station in Limpopo at a cost of Rd 20 billion ($3.44 billion) is expected to add a further 1,800 MW.

Planned electricity import projects include Cahora Bassa in Mozambique, the proposed Inga 2 and 3 hydropower project in the Democratic Republic of Congo (DRC) and the potential to buy surplus power from the Southern African Power Pool.