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THE Zimbabwe Energy Regulatory Authority (Zera) says it is considering cancelling the electricity generating licences of Essar’s two indicated power projects due to “lack of progress” on the ground.
Essar Africa Holdings, which in 2010 agreed to acquire a 54 percent stake in the Zimbabwe Iron and Steel Company (Ziscosteel) with initial plans to upgrade and revive the steel plant, said at the time that it was planning a 300 megawatt (MW) power plant for the Kwekwe-based steel plant.
The Indian giant also applied to Zera for the construction and operation of a 600MW station in Hwange that would initially generate and supply electricity across the country.
Zera granted Essar both licences.
But Zera chief executive officer Engineer Gloria Magombo told the Parliamentary Portfolio Committee on Mines and Energy yesterday the energy regulator’s board was considering cancelling both licences.
“There are some projects, especially if you look at those two Essar projects, they are linked to the implementation of the Ziscosteel project. As a regulator, we believe that it’s one of those (independent power) projects that for now can be cancelled until such time as there’s clear direction in terms of where they are going in terms of the Ziscosteel project because there’s no progress on Ziscosteel.
“So those are some of the projects that the board has been considering withdrawing licences for. We’ll consult all the relevant ministries in terms of where they are in respect of that project,” said Engineer Magombo.
In August last year, Industry and Commerce Minister Mike Bimha told an Confederation of Zimbabwe Industries (CZI) annual congress meeting that NewZimSteel (formerly Ziscosteel) was expected to make its first production of liquid steel after two years because the Kwekwe steel plant required “complete re-construction”.
Engineer Magombo said the Essar IPPs are not the only energy projects that are in the firing line as several IPPs were not complying with the conditions set in their licences.
“Very soon we’ll be announcing some of the licences which will be cancelled because they have been given sufficient time to implement what they came and presented to the board . . . Each licence has clear conditions in terms of what needs to be achieved by a certain time period,” she said.
Engineer Magombo, however, added that some IPPs have since approached Zera requesting for changes in the parameters of their licences due to “circumstances beyond their control”. – BH24.
Online Reporter