<<< POWER

- The new power generation -

Power shortages, and even no power at all, are a tedious fact of life for many Sudanese people. This has prompted the authorities to actively seek private sector investors to sort out the electricity sector. "We have a shortage of electricity and the government cannot finance what we need," says Makkawi Awad, managing director of the state-run National Electricity Corporation (NEC). "Our government is convinced that there should be an eventual move towards privatisation." It would be difficult to understate the scale of the difficulties facing Sudan's electricity industry.

Put bluntly, the country simply cannot generate anywhere near the amount of power that it needs. At present, the country's installed generating capacity totals an estimated 600MW - far short of what is required by a population that is approaching 30 million people - and even this low figure is open to question. Industry analysts suggest that the actual working capacity of the Sudanese power stations probably totals no more than 430MW. Mr Awad says that only 30 per cent of the population receives electricity - and even for them, supplies are erratic.

Although hydroelectric schemes produce about 70 per cent of Sudan's power, the potential in this highly promising sector has barely been tapped so far and the country does not have enough fuel-based thermal power stations. Sudan's capital, Khartoum, depends on several oil-fired power stations with a combined generation capacity of only 150MW between them. This is far short of what the city requires, even before any of these stations go out of service. The inadequacies of the electricity system have obliged companies in the capital to install their own generating solutions, and many smaller businesses such as shops have followed suit.

But these emergency measures, which have by now become a normality for the business community, do little to help the capital's residents, most of whom cannot afford their own generators. It appears that nobody is entirely immune to the blackouts which have become a regular feature of everyday life in the city. According to one tale, which is only perhaps apocryphal, visitors due to meet President Omar Hassan al-Bashir turned up to find his official palace plunged into darkness by a power cut.

Industry analysts calculate that the absolute minimum power-generation capacity required in Sudan today is about 1,000MW. The NEC has set a target of boosting capacity by five times that much by 2010. "Electricity is very important to the economy and I know that if we are able to produce about 5,000MW in this country, many things will change," says Mr Awad. But reaching this target is not going to be easy, and the NEC chief warns that Sudan may already be behind schedule in terms of reaching the goal set for 2010. "We should have started two or three years ago," he says. "But at the time there were difficulties in obtaining finance."

In those days, Sudan was still importing oil at a considerable cost. Now that Sudan is producing and exporting its own crude, the picture has changed significantly for the better. Not having to pay for imported oil should allow the government to divert funds into overhauling the country's existing generation and distribution facilities, as well as building new capacity. That said, there is little doubt that even with the burden of oil imports lifted from the budget, Sudan is still going to need a lot of help. The leading question now is where that assistance is going to come from. Plans are afoot to build a new 200MW power station in the capital which would consume by-product gases from a new refinery operated by the Khartoum Refinery Company, a joint venture between China and Sudan.

Significantly, a Chinese delegation to Sudan earlier this year signed a $150 million loan agreement backing the proposed project at Garri, 30km north of Khartoum. Mr Awad emphasises that any investors are welcome to submit their proposals. "We are confident that if anybody comes to the NEC and offers investment, we will have a programme for them," he says. The government has amended the old legislation covering the electricity sector, with the specific intention of encouraging foreign investors.

The new laws also involve changes in the NEC's traditional role as the state monopoly producer and distributor of electricity in the country, with openings for private investors in the sector. The NEC is to operate as if it were just another electricity company. The legislation, which was approved in november, will open the doors for investors to come in as independent power producers," says Mr Awad. "They can build a power station and sell the electricity to the national grid. They can also build a grid and hire it out to people. They can invest in distribution in an area, and they can sell their electricity."

Amended legislation aims to encourage foreign investors

Customers for this electricity could include the NEC itself. Mr Awad says that the corporation will buy electricity "from anyone who wishes to sell it". All the signs suggest that, in this increasingly open power market, it is only a question of time before the NEC joins the private sector.