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Golden Sibanda Senior Business Reporter
THE Zimbabwe Power Company has made headway towards concluding technical discussions for expansion of generation capacity at Hwange Thermal Power Station by Chinese firm China Machinery Engineering Company, an official said.
Chief executive Mr Noah Gwariro said in an e-mailed response to questions from The Herald Business that technical negotiations were around 95 percent complete, but discussions on funding lagged behind, estimated to be about 50 percent done.
Zesa Holdings generation unit is negotiating with CMEC, the winner of the tender for the expansion of Hwange units 7 and 8 for a further 600MW to ease the country’s crippling power crisis. The expansion of Hwange Thermal Power Station is anticipated to cost about US$1,2 billion over a period of about 36 months
Zimbabwe has capacity to generate an average of 1 200MW against requirement at peak periods of up to 2 200MW. The deficit is minimised through imports from regional neighbours. However, the severe shortage has had costly ripple effects on the economy, domestic, commercial and industrial consumers due black outs caused by supply rationing.
“The technical negotiations for the contract for Hwange Power Station expansion are fairly advanced at around 95 percent complete. The funding arrangements are still under discussion at around 45-50 percent,” Mr Gwariro said yesterday.
What is, however, somehow a little disheartening is the fact that while discussions about funding arrangements have gone almost to half way stage, it would take at least 18 months to reach financial closure and ground breaking for work to start.
“The negotiations I mentioned . . . are for entering into a contract. After that it takes around 12 months to achieve financial closure and about six months to reach ground breaking for (expansion) work to start on the ground,” the ZPC boss said. “So the start date for the expansion project can only be estimated once a contract has been signed,” he added.
But what should lift the spirits of an entire nation blighted by frequent power cuts to balance overwhelming demand against limited generation capacity is that there has been notable progress towards projects to ramp up power output.
Government and the China Export and Import Bank signed a US$319 million loan agreement in early November last year for the expansion of Kariba South hydro power station’s generating capacity. Finance Minister Patrick Chinamasa signed on behalf of the Government, while China Exim Bank vice president Mr Zhu Hongjie represented the bank.
ZPC is also part of the Zambezi River Authority steering committee from Zimbabwe and Zambia for the construction of a new hydro power station at Batoka Gorge on the mighty Zambezi River in a development expected to churn out 600MW.
Construction of Batoka Gorge Hydro Power Plant had been stalled by differences between Zimbabwe and Zambia with the latter claiming it was shortchanged when the two shared assets of collapsed ex-Central African Power Corporation, a power utility set up during the federation of Zimbabwe, Zambia and Malawi, which generated power at Kariba Dam.
Currently, work to appoint a consultant for updating feasibility studies on developing Batoka Gorge is on-going after Zimbabwe agreed to pay the US$71 million-plus for the loss Zambia was said to have suffered when the ex-Capco was disbanded.
Progress will be registered in other big private sector-led power generation initiatives that include RioZim Limited’s US$4,2 billion Gokwe North thermal power project. China Africa Sunlight Energy last year said it will invest up to US$2,1 billion in developing coal mines and a 600MW plant by 2015 in Matabeleland North.
A total of 12 licences have so far been issued to independent power producers by the Zimbabwe Energy Regulatory Authority for projects ranging from hydro and thermal initiatives to biogas and solar-based generation projects.
Online Reporter