New powerline for Manhize steel plant
A MAJOR 100km extension to the core 330 kilovolt national electricity grid is being built by Zesa’s distribution unit, ZETDC, with loan funding from Dinson Iron and Steel Company (Disco), the operational arm of Tsingshan Holidings in Zimbabwe, to ensure the new giant steel mills at Manhize in Chivu District can be connected to the grid at Sherwood near Kwekwe and receive the vast amount of power they will need.
Cabinet approved the investment yesterday with Disco, which is building the giant steelmills and the iron and other mining in the Chivu and Chirumanzu areas, will be funding the extension to the national grid, including the giant substations, with the loan being paid off over five years through deductions on its electricity bills.
The new connection and grid extension will also benefit many other businesses on the route, since Disco, even when going full throttle, will only need 60 percent of the energy carried by the new line, leaving the other 40 percent for other Zesa customers, Information, Publicity and Broadcasting Services Minister Monica Mutsvangwa said after yesterday’s Cabinet meeting.
Tsingshan Holdings, one of the world’s largest steel makers, came into Zimbabwe as a top investor signing an agreement in 2018 to build a two million tonnes per year steel plant.
The deal only became possible with the advent of the Second Republic with President Mnangagwa able to assure China’s top industrialist that Zimbabwe was serious about its investment and business drives in a corruption-free environment.
Disco will be producing a range of steels and stainless steels and products made from these, such as roofing sheets and a wide range of requirements for local and regional markets.
Minister Mutsvangwa said Finance and Economic Development Minister Mthuli Ncube presented the proposed partnership between Disco and ZETDC for the construction of the 330kV line over 100km from Sherwood, the major grid interchange near Kwekwe, to Manhize.
“Cabinet would like to highlight that Dinson Iron and Steel Company is setting up a greenfield integrated iron and steel plant, alongside mining of iron in the Chivhu District of Mashonaland East Province and Chirumanzu District of the Midlands Province,” said Minister Mutsvangwa.
“The US$750 million investment will significantly contribute to the country’s economic growth. Disco has accordingly applied to be connected to the national electricity grid in order to access the requisite power for its plant operations.
“The electricity transmission line will stretch from the Kwekwe Sherwood Substation to Disco’s iron and steel manufacturing plant at Manhize in Chivhu.”
Minister Mutsvangwa said to finance the connection, ZETDC will enter into a public-private-partnership agreement whereby Disco will pre-finance both phases of the construction project as a loan to Zesa.
“The loan will be recovered from ZETDC through deductions from Disco’s monthly bills until the loan is paid up, over an estimated 5-year period.
“Cabinet invites the public to note that this electricity line will not only be dedicated to Disco, but will also be available to other ZETDC customers along the way.”
In terms of the partnership, ZETDC will use 40 percent of the electricity.
Minister Mutsvangwa said during Phase 1 of the project, DISCO will require only a fraction of its 60 percent allocation, leaving the rest available to ZETDC.
“The partnership will therefore allow Disco to access a reliable and regular supply of power from ZETDC for their iron mining and processing operations on time. Local communities will also benefit by receiving consistent power supplies as approved by Cabinet,” she said.
Some of the benefits from the project include that ZETDC will have an asset on its balance sheet immediately after commissioning, creation of direct employment of 300 skilled, semi-skilled and unskilled jobs during the construction phase.
At least 80 percent of the general labour force will come from local communities.
Other benefits are that Zimbabwe’s power transmission capability will be augmented and reinforced, and the construction of the powerline will capacitate the country to substantially contribute to the regional Southern African Power Pool, which facilitates trade in power across Southern Africa.
The Disco investment has two sites, one in Chirumhanzu in the Midlands Province, dealing with smelting of iron ore and another in Chikomba, Mashonaland East Province, responsible mainly for the mining and beneficiation.
In another case, Minister Mutsvangwa said Cabinet approved the Electricity Amendment Bill, presented by the Attorney-General, Advocate Prince Machaya, on behalf of Justice, Legal and Parliamentary Affairs Minister Ziyambi Ziyambi.
“The Bill introduces stiffer penalties for those who abstract or divert electricity, and ensures that those who use such electricity knowing that it was illegally abstracted or diverted also face charges and punishing.
“The Bill will also remove the option of a fine where one is convicted of the crime,” she said.
It was noted that Zesa is suffering huge losses due to theft and vandalism of the national electricity infrastructure and people making illegal connections, hence the need to introduce stiffer penalties.