Southern African electric systems: Opportunities for natural gas

✍ Scribed by Lock, Reinier

• Book ID: 102842981
• Publisher: John Wiley and Sons
• Year: 2007
• Weight: 877 KB
• Volume: 13
• Category: Article
• ISSN: 0743-5665
• DOI: 10.1002/gas.3410130802

✦ Synopsis

oncerning development of electric and gas C infrastructure projects in emerging nations (ENS), there are two "worlds" that seem far apart. On the one hand, there are independent power production (IPP) entrepreneurs negotiating project-financed contracts with host governments and utilities. On the other hand, there are international-financial-institu- tion (IF1)-sponsored "technical assistance" teams working with utilities to modernize these systems. In fact, they are closely 1inked.l its bslance sheet with guarantees on huge projects would not only run afoul of IMF standards but also undermine the central thrust of the reform program-

India: A Lesson Learned

India is a good case in point. There, the government launched a highly ambitious private power program with a package of major incentives for IPP developers. This tariff was very generous to the efficient operator, contained tax breaks, promised "one-stop" permit shopping, and contained similar devices. The program got off to a promising startdozens of developers signing scores of memoranda of understanding for many thousands of megawatts.

However, it floundered. Most developers found that the "offtake" utilities that were to purchase their power, the state electricity boards (SEBs), were typically in bad financial shape. These lenders would require not only state but also Government of India (GOI) guarantees of power purchase agreements (PPAs). GO1 soon recognized that loading up Reinier Lock is a partner in the Washington, DC, law firm of McKenna and Company.