PROJECT DESCRIPTION
Project is located on South Rukuru River in Rumphi district. Fufu is designed as a storage power plant through the reservoir formed by a 114m high RCC dam, it therefore offers the possibility to be operated in base mode, following the load and responding to the instant changes in power demand. The guaranteed generating capacity of the station is 146.3 MW and the total installed capacity is 261 MW. The objective of the project is to increase the supply and reliability of power in the country.
The geographical location of the power plant is very ideal for system voltage stabilization as it is situated in the northern region of Malawi which has no generating station rendering it prone to power quality issues due to long transmission distances. A feasibility study on the Fufu Hydropower Project is available."
LOCATION
The project is located on South Rukuru River in Rumphi district.The South Rukuru River catchment is the largest water resource area in Malawi draining directly into. Lake Malawi. The South Rukuru River has a long-elongated catchment, west of the Great Rift Valley,with an area of 12 705 km² running mostly to the North.The area of the Fufu project extends from the Livingstonia Hills and Uzumara Plateau, where the South Rukuru flows in the Northern part of its valley, to the shore of Lake Malawi in the East."
BENEFITS OF THE PROJECT/ALIGNMENT OF PROJECT TO GOVERNMENT GOALS
The project is aligned with Government's energy sector and economic development goals as outlined in the National Energy Policy and the Malawi Growth and Development Strategy respectively. The project will benefit Malawians and the Southern African Power Pool (SAPP).Malawians will benefit from the project as it will provide more power to the national electricity grid and their access to electricity for households as well industries will be expedited and increased. Employment opportunities will also be created during and after construction of the project. Implementation of the project will increase Malawi's power generation capacity which will boost industrialization (both import substitution and value addition). It is expected that surplus power from the project will be exported to the Southern African Power and Pool (SAPP) and this will generate foreign exchange for the country.
FINANCIAL REQUIREMENTS
A Bankable feasibility study conducted for the project reveals that the investment cost for the project is US$702.5 million and the specific investment cost is US$2,700 per kW. The project IRR is approximated to be 12.1% and the levelized electricity cost is 3.5 US cents/kWh.Additionally the project's Net present Value is US$123 million.
PROPOSED INVESTMENT MODEL (ACTIONS REQUIRED/IMPLEMNTATION ARRANGEMENT/CONTRACT TYPE)
Government preference is to develop the project through a Public Private Partnership (PPP) arrangement. The project will be implemented following a build-own-operate and transfer (BOOT) model. A Special Purpose Vehicle (SPV) will be established to oversee the implementation of the project. After construction, an operations and maintenance contractor will be engaged to to operate the plant
PROJECT FEASIBILITY
The project is technically, economically and environmentally feasible. It proposes a 350 Megawatt hydro-power plant.
Financial Feasibility
The project is financially feasible and sustainable. The financial internal rate of return (FIRR) for the project ranges from 12% to 17.5% and a Net Present Value of between US$110.5 million and US$ 356 million respectively depending on the scenarios. Additionally, the Cost-Benefit results of the project are very promising ranging from 1.03 (where construction is delayed by one year and the construction cost increased by 10%) to 1.35 where the construction cost is decreased by 10%. These results show that the project is financially viable as the revenues from the project are sufficient to cover its capital costs and operating costs and to provide the investor with an adequate profit.
Project is located on South Rukuru River in Rumphi district. Fufu is designed as a storage power plant through the reservoir formed by a 114m high RCC dam, it therefore offers the possibility to be operated in base mode, following the load and responding to the instant changes in power demand. The guaranteed generating capacity of the station is 146.3 MW and the total installed capacity is 261 MW. The objective of the project is to increase the supply and reliability of power in the country.
The geographical location of the power plant is very ideal for system voltage stabilization as it is situated in the northern region of Malawi which has no generating station rendering it prone to power quality issues due to long transmission distances. A feasibility study on the Fufu Hydropower Project is available."
LOCATION
The project is located on South Rukuru River in Rumphi district.The South Rukuru River catchment is the largest water resource area in Malawi draining directly into. Lake Malawi. The South Rukuru River has a long-elongated catchment, west of the Great Rift Valley,with an area of 12 705 km² running mostly to the North.The area of the Fufu project extends from the Livingstonia Hills and Uzumara Plateau, where the South Rukuru flows in the Northern part of its valley, to the shore of Lake Malawi in the East."
BENEFITS OF THE PROJECT/ALIGNMENT OF PROJECT TO GOVERNMENT GOALS
The project is aligned with Government's energy sector and economic development goals as outlined in the National Energy Policy and the Malawi Growth and Development Strategy respectively. The project will benefit Malawians and the Southern African Power Pool (SAPP).Malawians will benefit from the project as it will provide more power to the national electricity grid and their access to electricity for households as well industries will be expedited and increased. Employment opportunities will also be created during and after construction of the project. Implementation of the project will increase Malawi's power generation capacity which will boost industrialization (both import substitution and value addition). It is expected that surplus power from the project will be exported to the Southern African Power and Pool (SAPP) and this will generate foreign exchange for the country.
FINANCIAL REQUIREMENTS
A Bankable feasibility study conducted for the project reveals that the investment cost for the project is US$702.5 million and the specific investment cost is US$2,700 per kW. The project IRR is approximated to be 12.1% and the levelized electricity cost is 3.5 US cents/kWh.Additionally the project's Net present Value is US$123 million.
PROPOSED INVESTMENT MODEL (ACTIONS REQUIRED/IMPLEMNTATION ARRANGEMENT/CONTRACT TYPE)
Government preference is to develop the project through a Public Private Partnership (PPP) arrangement. The project will be implemented following a build-own-operate and transfer (BOOT) model. A Special Purpose Vehicle (SPV) will be established to oversee the implementation of the project. After construction, an operations and maintenance contractor will be engaged to to operate the plant
PROJECT FEASIBILITY
The project is technically, economically and environmentally feasible. It proposes a 350 Megawatt hydro-power plant.
Financial Feasibility
The project is financially feasible and sustainable. The financial internal rate of return (FIRR) for the project ranges from 12% to 17.5% and a Net Present Value of between US$110.5 million and US$ 356 million respectively depending on the scenarios. Additionally, the Cost-Benefit results of the project are very promising ranging from 1.03 (where construction is delayed by one year and the construction cost increased by 10%) to 1.35 where the construction cost is decreased by 10%. These results show that the project is financially viable as the revenues from the project are sufficient to cover its capital costs and operating costs and to provide the investor with an adequate profit.