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Lloyd Gumbo Harare Bureau
President Mugabe’s recent State visit to China has started paying dividends, with Zesa Holdings and officials from a Chinese firm which won the tender to expand Hwange Thermal Power Station expected to sign the engineering, procurement and construction deal tomorrow. The government directed that Sinohydro, which was the second highest bidder, be awarded the tender of $1,1 billion after the winning bidder, China Machinery Engineering Company, failed to demonstrate financial capacity to undertake the project about a year after winning the tender.
Sinohydro has already started another electricity expansion project at Kariba South where 300MW are expected to be generated and added to the national grid.
The expansion of Hwange Power Station is expected to add 600MW to the national grid, with the two projects expected to meet Zimbabwe’s peak demand of about 2,200MW including current production of about 1,200MW.
Zim-Asset identifies energy and power development as key enablers to productivity and socio-economic development.
“The Minister (of Energy and Power Development) made a report to Cabinet on Tuesday and they agreed that we can sign the agreement. So we’re signing on Friday with Sinohydro,” said Zimbabwe Power Company managing director, Noah Gwariro.
He said signing of the deal would facilitate access to funding from China Export and Import Bank.
Gwariro said Sinohydro had the capacity to do Kariba and Hwange expansions concurrently.
“We had a team which went to do due diligence on Sinohydro and proposed funders, China Exim Bank last month, and they came back with positive news that they can do the work,” said Gwariro.
An official with Sinohydro Zimbabwe, who requested anonymity, said signing of the agreement tomorrow would kickstart basic design, including geological investigations.
“That will also enable us to start facilitating funding for the project from China,” said the official.
“Our vice-president of Sinohydro Africa, Wang Xinhuai, will be coming to Zimbabwe on Thursday afternoon ahead of the signing.”
The official said Sinohydro concurred with Gwariro that they had capacity to deliver on the two projects.
“We’ve 360 projects under construction around the world, with 210 projects in Africa alone,” said the source. “We’ve 130,000 employees, so we’ve the capacity to do the two projects at the same time.”
During President Mugabe’s State visit to China last month, nine mega deals were signed mainly in the construction and funding of energy and infrastructural development projects.
The Chinese government committed to provide funding for any viable projects that Zimbabwe wanted, with loan repayment to be recouped from the same.
Finance and Economic Development Minister Patrick Chinamasa said Hwange and Kariba South expansion projects were some of the projects that China expressed interest in funding during Zimbabwe-China Joint Permanent Commission meetings ahead of President Mugabe’s visit.
Online Reporter