SUDAN - Electricity.

Sudan's first independent power production (IPP) venture went on stream recently near Khartoum. Described as the world's largest diesel power plant of its kind, this sells its output to the state-owned Sudan Electricity Corp. (SEC). It has the capacity of 257 MW and burns heavy diesel.

The plant was built by a consortium led by the Industrial Solutions & Services unit of Siemens of Germany and including Cegielski of Poland. The EPC contract for this, worth over $180m, was awarded in late January 2002.

The IPP is owned by DIT Power Kilo-X of Malaysia. This is among a number of Malaysian companies brought to Sudan by Petronas in the late 1990s. Most of them are operating as contractors in the upstream oil sector.

Sudan's electricity sector is plagued by poor infrastructure, frequent outages and a small customer base, problems that the Ministry of Energy and the state-owned SEC have only begun to address in the last five years. Currently, Sudan has 985 MW of electric power generation capacity, which includes roughly equal amounts of thermal (mainly oil) and hydropower capacity.

The country's main generating facility is the 280-MW Roseires dam located on the Blue Nile river basin, approximately 315 miles south-east of Khartoum.

The insufficiency of the country's generation fleet can be attributed mainly to a lack of expansion in the face of rising electricity demand, but has also been exacerbated by the reliance on hydropower generation, which varies depending on rainfall. In 2002, Sudan's total electricity generation was 2.4 billion kilowatthours (kwh).

Power is transmitted by way of two inter-connected electrical grids - the Blue Nile Grid and the Westen grid - although together, they cover a small portion of the country. Regions not covered by the grid rely on small-scale diesel fired generators. In total, it is estimated that only 30% of Sudan's population has access to electricity, but the country has set a goal of increasing that to 90%, at a cost of $3,000 million, in coming years.

Under-investment in the electricity sector due to lack of funding is largely blamed for its deterioration during the 1990s. In 2000, the SEC launched a "Rehabilitation and Performance Improvement Programme", aimed at upgrading the existing electric power infrastructure in order to improve the adequacy and reliability of the supply system.

This programme has been supported by a $10 million loan from OPEC's Fund for International Development. In response Sudan's power shortage problems, projects are underway to add both fossil-fuelled and hydropower generating capacity.

The largest of these projects are the proposed Merowe and Kajbar hydro-electric facilities in northern Sudan. The 1,250-MW Merowe facility is to be located 250 miles north of Khartoum at the Nile River's fourth cataract. So far, Egypt has voiced no major objections to the project's planned diversion of Nile River flows. Construction began this year, with completion scheduled for July 2008. But the start up could be delayed until late 2008 or early 2009.

In December 2003, the French power firm Alstom agreed to a $300 million contract to construct the dam, while Harbin Power of China signed an agreement to build seven sub-stations and around 1,000 miles of transmission lines.

In 2002, the Merowe project received major funding commitments from Saudi Arabia, Qatar, and other Arab states, with each having pledged loans of $15 million or more. Two consortia met the October 2002 deadline to bid for the contract to build three packages of the civil works portion of the dam, which has been estimated to cost about $1,900 million.

The consortia are a joint venture of China International Water & Electric Corp. and China National Water Resources & Hydropower Engineering Corporation, and a joint venture of Consolidated Contractors International Company (CCC) of Greece and Salini Costruttori of Italy.

The Kajbar Dam, located at the Nile's second cataract, is currently under construction, and will have a 300 MW capacity. An agreement to finance the Kajbar project was signed between Sudan and China in September 1997.

Under terms of the agreement, China has been financing 75% of the project (approximately $200 million) and Sudan is to provide the remaining 25%.

Environmental groups have expressed concern about Kajbar Dam, citing potential damage both to the Nile ecosystem and to the culture of the displaced Nubian residents of the area.

The director of the SEC said in April 2001 that Sudan and Ethiopia had agreed to link their power grids. A related report in April 2001 indicated that Ethiopia had agreed to export power to Sudan and Djibouti.

In September 2002, Ethiopian television reported that the two states had agreed to do what was necessary to implement previously proposed development projects through joint use of Nile waters, though the report did not give details about what was expected from each state.