KEPCO Steps on the
Gas to Build Up
Presence in Africa

Wins a $450 million order from WAPP

Korea Electric Power Corporation (KEPCO) has landed a $450 million project to build electricity facilities from the West African Power Pool (WAPP).
KEPCO Chairman and CEO Lee Won-gul and WAPP Chairman Joseph Makoju signed an agreement for the construction and operation of electricity facilities at the KEPCO head office in Seoul on Feb. 11.
The deal calls for the construction and operation of 330kV-class transmission lines and substations in a 110 km-long electricity line section between Benin and Togo. KEPCO will be given the right to operate a 400MW-class combined cycle gas power plant in Benin for 20 years in return for the construction of the power plant.
The agreement signals the beginning of KEPCO's full-blown entry into the African power market. It is the second time KEPCO has been awarded an electricity project in Africa following its signing of a contract to upgrade the Egbin power plant in Nigeria in 2007.
However, the latest deal is significant in terms of size and content.
The project will be undertaken in a comprehensive package of financing, design, equipment and material procurement, construction, start-up operation and operation, the first such deal in the power industry. It is financed through a joint guarantee from the Korea Export Insurance Corporation and the World Bank.
The project is part of the WAPP's long-term power grid system plan worth a combined $4.6 billion. If KEPCO gains recognition for its technological prowess through the project, the beginning of an ambitious plan, chances are high that the company will land more orders to be offered under WAPP's plan. KEPCO plans to involve other Korean companies in upcoming WAPP projects in the roles of major equipment and materials suppliers.
KEPCO was awarded the contract, in part, because of support from the Korea International Cooperation Agency.
The KOICA's provision of financial support in a feasibility survey and basic design service for building up WAPP's electricity trade center turned out to play a role in KEPCO beating out China and India.
The deal is help up as a successful model for Korea to win projects while simultaneously providing aid to developing countries.
WAPP is one of five electricity power cooperative organizations designed to link the national grids of each member state in a bid to allow states with surplus electricity to sell to electricity-poor countries. It has 14 members including Ghana, Senegal, Benin and Nigeria.
KEPCO first set foot in the African electricity market in 2007 by landing a $25 million project to upgrade boilers at the Egbin thermal power plant in Nigeria and ensure its normal operation.
KEPCO was awarded the project to upgrade two boiler units by the Nigerian government, who recognized KEPCO's excellent technological power, outbidding their rivals, Marubeni of Japan and NPC of India. KEPCO officials said the contract was significant because it served as a bridgehead for entering the African power market.
The Egbin power plant, with a combined capacity of 1,320MW, located about 60 km east of Lagos, the economic capital of Nigeria, accounts for about 30 percent of Nigeria's total power generation.
A recent boiler explosion has suspended operation of two power units with a capacity of 440MW, exacerbating the chronic power shortage Nigeria has suffered in recent years.
The reality is that most of Nigeria's power units are decrepit, so the power plants badly need to be upgraded with a power supply of 4,429MW or about 63 percent of the African nation's power capacity of 7,056MW. The nation has an insufficient power infrastructure with a power supply rate of less than 50 percent. Most large buildings and houses for middle- or higher-income households find themselves suffering from excessive noise and exorbitant electricity charges since they have to depend on their own independent power generation equipment.
KEPCO has designated Nigeria, which ranks 10th in global crude oil production, as a strategic center for entering the African market. The Korean electricity company expects Nigeria's electricity market to be one of KEPCO's growth engines by combining KEPCO's technological power and Nigeria's resources in keeping with a strategy of linking electricity and energy resources.
In a related development, KEPCO is considering plans to open a representative office in South Africa as part of its efforts to strengthen its presence in the African market, sources said. KEPCO plans to dispatch two resident employees, one from KEPCO and the other from Korea Hydro & Nuclear Power Co., to South Africa to conduct a feasibility study regarding future electricity projects, they said. It is the first time for KEPCO to send its resident employees to Africa. nw

KEPCO Chairman Lee Won-gul and West African Power Pool Chairman Joseph Makoju show a document on the agreement for the construction and operation of electricity facilities for the WAPP after inking the deal at KEPCO headquarters on Feb. 11.

The Ba Ria Combined Cycle Power Plant in Vietnam, a project being done by KEPCO