Egyptian firms to build $3bn power plant on Tanzanian world heritage site

Updated 12 December 2018
0

Egyptian firms to build $3bn power plant on Tanzanian world heritage site

  • Arab Contractors and El Sewedy to build plant
  • Plan triggers protests from environmentalists

DAR ES SALAAM: Tanzania has signed a deal with Egypt’s El Sewedy Electric and Arab Contractors to build a $3 billion hydroelectric plant on a World Heritage site in the country, that will more than double Tanzania’s power generation capacity.
The project has faced opposition from conservationists, who say the construction of a dam on a river that runs through the Tanzania’s Selous Game Reserve, known for its elephants, black rhinos and giraffes, as well as many other species, could affect the wildlife and their habitats.
Energy Minister Medard Kalemani, said in comments broadcast on state television on Wednesday that the plant would have an installed capacity of 2,115 megawatts, calling it “a very huge dam project.”
Representatives of state-run Tanzania Electric Supply Co, El Sewedy and Arab Contractors signed the agreement in the presence of President John Magufuli and Egyptian Prime Minister Mostafa Madbouly, TV broadcasts showed.
Magufuli said the project will be wholly funded from taxes. Monthly tax revenue collection has increased from 850 billion shillings ($370.37 million) per month before he came to power in late 2015, to an average of 1.3 trillion shillings ($566.45 million)under his administration, he said.
“When we asked for financing for this project, the lenders refused to give us money but thanks to improved tax collection, we are able to finance this project using our own resources,” he said.
Arab Contractors will have a 55 percent stake in the project and El Sewedy 45 percent, El Sewedy said on Tuesday.
El Sewedy said the Egyptian stock market had halted trading of its shares pending details on the deal it had signed.
Covering 50,000 square kilometers, the Selous Game Reserve is one of the largest protected areas in Africa, according to UNESCO.
The World Wildlife Fund conservation group said in a report in July last year the proposed hydropower dam “puts protected areas of global importance, as well as the livelihoods of over 200,000 people who depend upon the environment, at risk.”
Officials at the WWF Tanzania office were not immediately available to comment on Wednesday’s deal.
Magufuli dispelled the environmental concerns, saying Tanzania had allocated 32.5 percent of its total land mass to conservation.
“The dam will become a major source of water and the cheap electricity to be produced from the dam will reduce the number of people who cut trees for firewood,” he said.
Magufuli, nicknamed “the bulldozer,” for his forceful leadership style, has in the past pushed for the project to start as quickly as possible to speed up development.
He has introduced anti-corruption measures and tough economic reforms and pushed for swift completion of big infrastructure projects including roads, railways and airports.


WEEKLY ENERGY RECAP: Traders keep their heads amid increased risk to tankers

Updated 46 min 1 sec ago
0

WEEKLY ENERGY RECAP: Traders keep their heads amid increased risk to tankers

  • Oil seems to be steady in the $60 per barrel range for Brent even if the risks for tankers in the Arabian Gulf have gone up

RIYADH: Counterintuitively, the latest attacks on tankers in the Gulf of Oman which ratcheted up regional tensions, did not have the same effect on the oil price, which ended the week lower. 

Brent crude and WTI prices deteriorated to $62.01 and $52.51 per barrel respectively. In the past even an isolated tanker hijacking or fire was enough to send the price rocketing — but these days traders appear more fixated on where global trade winds are blowing.

Oil seems to be steady in the $60 per barrel range for Brent even if the Arabian Gulf is now considered as one of the riskiest areas for oil tankers since the Iraq War. 

It is worth remembering that the Arabian Gulf is where more than a third of the world’s hydrocarbons are transported — a fact reflected in the rising premiums for tanker insurance in the region.

Yet while insurers seem to have responded to the increased geopolitical risks, oil traders are more sanguine. A slowing global economy, persistent trade war worries and rising shale output have combined to cap price increases.

The latest monthly reports from both OPEC and the IEA also cut their demand forecasts, adding to bearish sentiment.

OPEC, in its report, cited weaker growth in global oil demand amid escalated and ongoing global trade tensions, as a key factor in the downward adjustments to the outlook for global oil demand.

  • Faisal Faeq is an energy and oil marketing adviser. He was formerly with OPEC and Saudi Aramco. Twitter:@faisalfaeq