Sinohydro experts at Hwange

Golden Sibanda
SINOHYDRO Corporation has deployed engineering experts at Hwange Thermal Power Station to work on plant designs and site plans for the expansion project that is expected to add 600 megawatts to the national grid.

Though the deployment of engineers raises hope that civil works might begin soon, the Zimbabwe Power Company is not having it easy in tying up the loose ends of a US$1,1 billion facility to bankroll the project.

While Zimbabwe says it has met all conditions precedent, the publicly-guaranteed debt to China has become a major sticking point to financial closure.

China’s state credit insurance agent, Sinosure, is reportedly insisting that Zimbabwe first clear part of the outstanding debts to get fresh loans.

Sinohydro was engaged for the US$533 million Kariba South extension project, which is now 91 percent complete. It will add 300MW to the plant’s current installed capacity of 750MW.

ZPC managing director Engineer Noah Gwariro is, however, confident that a breakthrough is imminent.

“The delay in financial closure for Hwange is merely by a few months and this will not affect us much. As we speak, there is a Sinohydro team on the ground in Hwange working to finalise the project designs and site plans,” Eng Gwariro said.

Zimbabwe aims to be energy self-sufficient by 2018, and is planning to export electricity by 2022.

Eng Gwariro said: “We are confident that the project will be completed within the original budget estimates because this is an EPC (engineering, procurement and construction) contract and we are on target to complete the project in time, hence there will be no extra costs to be incurred.

“ZPC has met most of the conditions precedent and parties are now preparing to receive the bulk of equity contribution into the project company.”

Part of the outstanding debt to China includes US$380 million extended to TelOne and US$80 million worth of agricultural equipment loans given to Farmers World.

Government has resolved to assume the loans, and recently mobilised US$7,2 million for part payment of long standing debt arrears to Sinosure following reports the insurance company was reluctant to guarantee further loans to Zimbabwean companies.

Separately, Eng Gwariro said targets for Kariba South were on track.

“The project is at 91 percent to date. “We are on target. Unit 7 will be on load before the end of 2017.

“We are confident that the project will be completed within the original budget estimates because this is an EPC contract and we are on target to complete the project in time, hence there will be no extra costs to be incurred,” he said.

ZPC says unit 7 of the extended capacity will go on line on December 25, while unit 8 will add a further 150MW on March 19, 2018.

Demand for power in Zimbabwe is estimated at 1 400MW, but current generation capacity stands at just over 1 000MW.