Zesa to raise $314m for Hwange Power Sta­tion

Chronicle (Zimbabwe) - - Business - Ti­nashe Ma­kichi Harare Bureau

ZESA Hold­ings ex­pects to raise $314 mil­lion by end of this year for its equity con­tri­bu­tion to­wards Hwange Power Sta­tion ca­pac­ity ex­pan­sion to pave way for fi­nan­cial clo­sure for the project.

The Hwange Power Sta­tion ex­pan­sion project will add 2x300 megawatts coal fired units to be in­stalled ad­ja­cent to the ex­ist­ing 920MW power plant.

The $1,5 bil­lion project will also in­clude trans­mis­sion build­ing of in­fras­truc­ture to en­able power evac­u­a­tion from the plant while new sub­sta­tions will be con­structed at Hwange and Sher­wood.

An en­gi­neer­ing, pro­cure­ment and con­struc­tion con­tract was signed in 2014 with Si­no­Hy­dro of China.

A $997 mil­lion pref­er­en­tial buyer’s credit agree­ment was signed with China Ex­imBank in De­cem­ber 2015.

Zesa Hold­ings chief ex­ec­u­tive En­gi­neer Josh Chi­famba told the Par­lia­men­tary Pot­fo­lio Com­mit­tee on Mines and En­ergy yes­ter­day that Zesa had been ne­go­ti­at­ing with sev­eral fi­nan­cial in­sti­tu­tions to raise the equity con­tri­bu­tion re­quired for the project to take off.

“We have not yet started on that project be­cause we are still await­ing fi­nan­cial clo­sure and as Zim­babwe Power Com­pany we are sup­posed to raise $314 mil­lion for equity fund­ing, the rest is ob­vi­ously cov­ered by a loan from China.

“We be­lieve and we are hope­ful that by year-end we should have raised that money. We have had some very en­cour­ag­ing dis­cus­sions with some banks to­wards that,” said Eng Chi­famba.

Eng Chi­famba said works done on the project in­clude topo­graph­i­cal sur­veys, geo-tech­ni­cal sur­veys and coal anal­y­sis to en­able de­signs of the power plant and trans­mis­sion in­fras­truc­ture.

The Gov­ern­ment, through Zesa, is work­ing on in­creas­ing do­mes­tic power gen­er­a­tion to bridge the gap be­tween sup­ply and de­mand with pro­duc­tion at 1 000MW against peak de­mand of 1 400MW

Eng Chi­famba said there are sig­nif­i­cant chal­lenges in ex­pe­dit­ing com­ple­tion of a num­ber of en­ergy projects, es­pe­cially re­lated to what he termed the “low elec­tric­ity tar­iff ” the util­ity is charg­ing con­sumers.

“The tar­iffs we are charg­ing are not at­trac­tive to in­vest­ment. At the mo­ment our tar­iffs are not re­flec­tive of the costs we are in­cur­ring as a util­ity and I could say we are sup­ply­ing elec­tric­ity at a loss,” he said.

In ad­di­tion to Hwange, Sino Hy­dro won the con­tract for the ex­pan­sion of Kariba South Power Sta­tion to add 300MW to its the cur­rent out­put of 750MW at a cost of $533 mil­lion, also funded through a China Ex­imbank loan.

Eng Chi­famba said the Kariba South project is pro­gress­ing well and cur­rently stands at 62 per­cent com­plete.

The first unit of 150MW is sched­uled for com­mis­sion­ing in De­cem­ber 2017 while the sec­ond unit will come on line by March 2018.

“Civil ex­ca­va­tions on the project have been com­pleted for nine adits, un­der­ground pow­er­house, wa­ter in­take, trans­former plat­form, emer­gency gallery, bus bar gallery, head­race tun­nels and pen­stocks.

“In­stal­la­tion of a num­ber of elec­tro-me­chan­i­cal items has been com­pleted. This in­cludes tur­bine house crane, draft tube el­bow and cone, unit 7 stay ring among oth­ers,” said En­gi­neer Chi­famba.

Other ini­tia­tives projects be­ing pur­sued by Gov­ern­ment or pri­vate in­vestors to im­prove the power sup­ply sit­u­a­tion in the coun­try in­clude Gairezi Hy­dro, Deka Pump Up­grade (for sup­ply of wa­ter to Hwange Power Sta­tion), and re­pow­er­ing of small ther­mals in Bu­l­awayo, Mun­y­ati and Harare.

Com­ple­tion of the power projects is ex­pected to plug the power sup­ply en­ergy deficit and ease the rolling power cuts that have weighed down agri­cul­ture, man­u­fac­tur­ing and min­ing sec­tors.

En­gi­neer Josh Chi­famba

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.