Korea Western Power Co. (KOWEPO) and SK E&S have teamed up with GE Power Korea to win an 8-billion-won gas combined cycle power plant project in Mozambique, which has been emerging as an African resources country in recent years. The deal marks the first time that Korean companies have been awarded a mega-project worth trillions of won in Africa.
The Mozambican government signed an MOU on the build-operate-transfer deal for three gas-fired combined cycle power plants with a combined capacity of 3,600MW with the BKB consortium in Maputo, the country’s capital, on April 6, IB community sources said.
The winning consortium composes of BKB, a Korean infrastructure developer, KOWEPO, SK E&S, GE Power Korea, and BHI, a Korean boiler maker.
Starting with the construction of a 2,600MW power plant in Maputo, the consortium partners will build a 500MW power plant at Beira and Nikala. Expected investments will stand at $7 billion (about 8 trillion won). The figure is equivalent to the combined value of all of the projects that Korean companies have been awarded in Africa over the past five years.
The project was realized after the BKB consortium proposed it to the Mozambican government, which has been grappling with how to overcome a low power supply rate with and rich resources. The consortium plans to successfully wrap up the project and seize it as a platform to explore other power markets in Africa. The BKB consortium’s winning of the African mega-project takes on significance since it is an exemplary case in which Korean large-sized companies have joined forces with SMEs and middle-size superstars to explore a foreign market.
Meanwhile, KOWEPO got its foot in the door of the Indonesian bio-mass power market, singeing an MOU for a bio-mass project with Perhutani, an Indonesian forest public enterprise on April 7.
The two companies have agreed on a Phase 1, 3.3MW bio-mass power plant project and a Phase 2 that calls for afforesting 200,000 hectors of area and a 500MW bio-mass power plant.
Perhutani has agreed to collaborate in joint projects in photovoltaic power and hydro-electric power fields in which the Indonesian company has paid a keen interest. KOWEPO is involved in the 300MW Sumsel 5 Operation & Maintenance service project and a marine shipment terminal project in Indonesia. KOWEPO plans to grow its branch and manpower in the Southeast Asian country.
“With the signing of the MOU, KOWEPO plans to set Indonesia as one of the centers to make a resurgence and expand such power projects as coal-fired power and gas combined cycle on top of bio-mass power projects,” a KOWEPO official said.
KOWEPO Offers One-Stop Service to Foster SMEs into ‘Hidden Champions’
KOWEPO is offering a one-stop service program to promote shared growth with cooperative SMEs, ranging from support for their operation funds to manpower development. Business leaders say they appreciate a program that is tailored to meet their actual needs by providing financial support up to 100 percent of SMEs’ export insurance premiums. Cofacs, a valve maker, is an exemplary case of the one-stop service program. The company succeeded in localizing control valves whose market has been dominated by advanced countries, including the United States and Germany. Control valves that automatically control pressure, temperature and flow volumes are in wide use, not only for power plants, but also in other industrial equipment.
Cofacs was once a mid-size “superstar” company armed with its own R&D technology, which managed to explore overseas markets. But the company fell on hard times in the wake of the global economic recession in 2008. Cofacs failed to receive payments on exports and saw its debt ratio soar to 5,000 percent due to investments into R&D.
Cofacs resorted to axing its manpower, but the company failed to turn the corner.
KOWEPO launched a program to rescue Cofacs. Initially, the power company extended 1 billion won in long-term funds for “shared growth” to Cofacs.