FUFU HYDROPOWER PROJECTProject description
The Fufu hydropower project is located in Rumphi District, Northern Malawi. The design capacity of the high head hydroelectric power plants is 261 Megawatts. With a maximum gross head of 414.3 metres and a maximum reservoir storage capacity of 138 million cubic metres, the energy generation of the Fufu project is 1,128 Gigawatt-hours with 705 Gigawatt-hours of peak production. The project layout comprises the following main components:
1. The Fufu dam, 114 metres high above foundation implemented on the South Rukuru River in a narrow gorge area;
2. A hydraulic adduction system to the power station composed of:
A water intake including a shaft valve;
A headrace tunnel 4305 metres long;
A surge shaft; and
A penstock approximately 1200 metres long.
3. An external power station near Lake Malawi. A tailrace canal 34 metres long with an outlet discharging into the South Rukuru River near the outlet of the river into Lake Malawi;
4. The North Rumphi water transfer composed of:
A weir approximately 5 metres high; and
A water gallery transfer about 10 kilometres long.
5. The construction of a new national road about 15 kilometres long connecting the existing national road upstream and downstream of the reservoir.
During the construction of the Fufu dam, the South Rukuru river discharge will be diverted through a tunnel built in the left bank of the dam. An upstream cofferdam around 17 metres high will protect the worksite against a flood with a return period of 50 years.
The Fufu Project offers a compelling investment opportunity with numerous benefits, including:
Increased Revenue Streams: Benefit from enhanced hydropower production, stabilising Malawi's power system and tapping into suppressed demand.
Peak Capacity and Energy Security: Meet existing and future needs for peak capacity and energy.
Renewable Energy Source: Access a financially attractive source of renewable energy.
Regional Power Market Leadership: Join forces with downstream plants on the Shire River to become a key player in the Southern African Power Market (SAPP) for peak power provision.
Financial requirements
Total project costs are estimated at EUR 635,101,281.73 (US$ 702,585,000)
Financial feasibility
Under consideration of economic and financial aspects, the proposed project layout is found to be economically and financially viable, under the various sensitivity analyses performed, resulting in the relatively low generation levelized costs of 3.5 United States cents per kilowatt-hour (3.5 US$ct/kWh).
Key commercial data for the investment project are as follows:
Investment Costs: US$ 702.5 million
Specific Investment Cost: 2,700 United States Dollars per kilowatt (US$/kW)
Project Internal Rate of Return: 12.1%
Levelised Electricity Costs: 3.5 United States cents per kilowatt-hour (USct/kWh) for base and 13.5 USct/kWh for Peak
Net Present Value, NPV (ta=8%): US$ 123million
Project feasibility
Full Feasibility Study and Environment and Social Impact Assessment (ESIA) for the proposed Fufu site have already been done. Further to this, detailed designs and the documents required for tendering for construction works are already in place.
The project is expected to be implemented within a period of five years and six months, subject to availability of financial resources.
Proposed investment model
The Government of Malawi intends to implement the Fufu Hydropower Project through a Public-Private Partnership (PPP) scheme, leveraging collaborative financing and expertise.
Contacts: The Secretary for Energy
Private Bag 309
Lilongwe 3
MALAWI
Alfonso Chikuni, Principal Secretary for Ministry of Energy, alfonsochikuni@gmail.com
C. Chizonga, Chief Economist: cchizonga@yahoo.com
