SA may get $4bn gas-fired plant

Johannesburg - A South African development corporation plans to build a 3 200 megawatts gas-fired power plant to boost supply in the country's Eastern Cape province and beyond, an official said on Thursday.

Coega Development Corporation's (CDC) Business Development Executive Manager Khwezi Tiya said a feasibility study for the $4bn project would be completed this week.

CDC would seek out expressions of interest from potential developers by the end of this year, he said.

"We are planning to go to the market for the expression of interest before the end of this year so that within 2010 the preferred bidder can be appointed," he told Reuters on the sidelines of a conference in Johannesburg.

Tiya said the $4bn would pay for the construction of the power plant and the gas infrastructure.

He said CDC had initially planned for the construction to start in mid-2012, with the first power to be supplied by the end of 2013, but the timelines may shift slightly.

South Africa's utility Eskom has been struggling to feed the country's growing demand and has been rationing power since early last year when the national grid nearly collapsed, forcing mines and smelters to shut for days.

"The project is being done with the objective that we can diversify our energy base and increase supply... the plan is to feed the power directly to the national grid," he said.

Global miner Rio Tinto earlier this month scrapped its plan to build an aluminium smelter in the Coega region due to power shortages in the country.

The Eastern Cape province where Coega is located is one of South Africa's less developed regions and the government has been pushing to attract more investments to the area.

One of the proposed projects for Coega is a 400 000 barrels-per-day refinery, under development by state-owned oil company PetroSA, which is expected to start production in late 2014 or early 2015.

The refinery plans to produce up to 800 MW at the plant, to become independent of the strained grid.

- Reuters