GLASGOW-based Aggreko has unveiled a major power project in Africa, which is expected to be worth more than $200 million (£133m) over two years and will include the supply of electricity generated in Mozambique to Namibia.
Aggreko's shares surged 126p or 6.85% to 1965p after it announced yesterday it had signed "tri-party power-purchase agreements" with Mozambique utility Electricidade de Moçambique (EDM) and NamPower of Namibia, to provide 122 megawatts (MW) of gas-fuelled power from its interim power plant at Gigawatt Park at Ressano Garcia in Mozambique.
This share-price jump raised Aggreko's stock market worth by nearly £340m to about £5.28 billion.
Aggreko shares had tumbled from £21.25 to 1664p on December 17, when the company issued a profits warning. However, its shares have rebounded sharply since early last month.
Aggreko and South African joint venture partner Shanduka are already supplying 110MW of power to EDM and South African utility ESKOM from the power plant at Ressano Garcia, which was built last year and started production in July.
Aggreko said the success of this initial project had enabled it to offer additional power to other members of the Southern African Power Pool (SAPP).
It added that the SAPP was one of the world's largest interconnected grids, linking the power networks of nine countries in southern Africa. Aggreko said the new 122MW plant was scheduled to go into production in the second quarter, and would supply power for a minimum of two years.
Aggreko said the total value of the new project was likely to be "in excess of $200m, including fuel costs".
Natural gas for the project will be supplied by the Matola Gas Company.
Aggreko said that, of the 122MW of new capacity, EDM would use up to 32MW and NamPower up to 90MW.
Rupert Soames, chief executive of Aggreko, declared the new project would make Ressano Garcia "the world's largest cross-border interim power plant", with more than 232MW of gas-fuelled power generation.
Aggreko highlighted the fact it would be able to supply power generated in Mozambique to Namibia, more than 1500 kilometres (932 miles) away. It added that EDM would transmit the power over its network to the South African border, where NamPower would take delivery. Eskom, on behalf of NamPower, would handle the "wheeling" of the power across the South African grid network to Namibia.
Mr Soames said of the new project: "It underlines the immense potential of the Southern African Power Pool to be a real conduit of co-operation and development among the countries of southern Africa.
"The fact three national utilities are collaborating to support each other's energy requirements is testament to the benefit of working together for the common good."
Paulinus Shilamba, managing director of NamPower, said: "This innovative approach to securing an effective power supply for the people of Namibia is a great example of the spirit of southern African co-operation. This unique project will contribute to the provision of a reliable power supply across Namibia and support the continued development of the country."
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