The Western Corridor (Westcor) project

The objective of Westcor project is to harnesses the hydro resources in the Democratic Republic of Congo, linking it to five countries. The objective is to transport 3500MW power from the DRC to South Africa and to assist in developing the power export potential in Angola and to connect it to the power grid, which will form part of the Southern African Power Pool.

The Feasibility study to be carried out between 2005 and 2007 and commissioning is expected by 2011. There are five countries and their respectively utilities are involved in the project, namely: ENE of Angola, BPC of Botswana, Snel of the Democratic Republic of Congo, Nampower of Namibia, and Eskom in South Africa.

The purpose of the Westcor project is to exploit the environmentally friendly, renewable, hydroelectric energy of the Inga rapids site in the Democratic Republic of Congo (DRC). SNEL owns and operates the two existing power stations, Inga 1 and 2, which have a combined output of 1770MW. Inga 3 is the next phase of the development at the Inga site, with a rated output of 3500MW.

Load growth in the southern networks of Southern Africa has outstripped expectations because of energy intensive investments taking advantage of the excellent quality of supply available in the region at world competitive prices. The study model shows that additional generating capacity will be required in the Southern African Power Pool by 2005.

Further to Inga 3, the Westcor project will include the development of hydro power plants with an estimated capacity of 6700MW on the Kwanza River in Angola.

In order to provide regional and continental support to the Westcor project stakeholders such as SADC, the Southern African Power Pool, Regional Economic Communities, Development agencies such as the Development Bank of Southern Africa, African Development Bank and the World Bank are involved.

Westcor will be registered in Botswana to fund the engineering and financial studies, and build, own, and operate the infrastructure should the project prove to be viable.

For the base case, Westcor's capital investment would comprise two classic HVDC bipoles circuits and the Inga III power station. Westcor's tariff structure would have to recover a minimum gross return on capital invested to cover interest and redemption on loans, operating and maintenance costs, taxes and dividends to shareholders. With innovative designs, the capital cost can be reduced and the power station capacity increased.

Due to the nature of the project, the Energy sector is in negotiations with the Water sector to create a strategy to maximize on the resources in the sectors for the benefit of the country.

The key challenge is that this project is based on the world’s lowest cost energy region therefore lowest cost is an expectation and a competitive advantage. Delivered energy price is totally dependant on the power system capital costs. If the volume is increased then price can be simultaneously reduced.

The intergovernmental agreement, the inter-utility MOU, satellite route selection, shareholders agreement, Westcor company articles of association and the initial equity capitalization have been completed.