New company to take charge of Kariba project

Harare Bureau
GOVERNMENT will in the next two weeks set up a company to assume ownership of Kariba South power plant’s assets to ring fence revenues for clearing its expansion loan.
The company will be responsible for the implementation of the Kariba South Hydro Power Station capacity expansion project, which is expected to add 300 megawatts to the national grid.

The initiative forms part of a comprehensive strategy that Government adopted to ease a debilitating power deficit that has spawned rolling power cuts for domestic and commercial users.

Energy and Power Development Minister Dzikamai Mavhaire yesterday said his ministry will set up the board of directors for the new company within the next two weeks.

“We will set up the board. In two weeks the board will be there. We are talking to people (board members). We want capable people for the job, we need experienced and young people with right qualifications,” Minister Mavhaire said.

Minister Mavhaire expressed satisfaction with progress on the project thus far, regardless of recent reports that nothing was moving, saying some of the equipment for the project was already on site while offices to be used during the expansion had been built.

However, there is concern that formation of the new firm, a prerequisite for the release of the Chinese loan for the expansion, was moving slowly with fears abound this could delay the expansion programme. The bid for the project was won by China’s Sino Hydro.

Our Harare Bureau understands that the Kariba South South assets will be transferred into the new company as per provisions of the multi-million dollar loan agreement the Zimbabwe Power Company signed late last year with China Export and Import Bank.

The loan facility from China Eximbank, secured by the then Victor Gapare-led Zimbabwe Power Company board, represents one of the brightest prospects that Zimbabwe holds regarding some definitive steps towards easing crippling power shortages.

Finance Minister Patrick Chinamasa signed for the loan in December last year on behalf of Government while China Eximbank vice-president Zhua Hongjie represented the bank.

Minister Chinamasa said under this arrangement, the bank will provide funding amounting to $319,5 million, representing 90 percent of the total project cost, while government, through the Zimbabwe Power Company will finance the 10 percent balance amounting to $35,4 million.

Industry sources said the former ZPC board exhibited great ingenuity to secure the loan under a loan agreement that enables the project to repay the debt from its own revenues. Zimbabwe is faced with crippling power shortages as it is currently able to generate an average of 1,200MW against national requirement for power at peak demand periods of 2,200MW.