Hwange Power Station expansion project awaits financial closure

Hwange Power Station

Hwange Power Station

THE US$1,3 billion project to increase Hwange Thermal Power Station’s electricity generation by 600 megawatts is awaiting financial closure, a Zimbabwe Electricity Transmission and Distribution Company (ZETDC) official has said.

Hwange, the country’s oldest coal-powered station is producing about 650 megawatts from an installed capacity of 920 MW but government awarded Sino Hydro Corporation the tender to add two 300MW units in June last year after another Chinese company, China Machinery and Engineering Company, had failed to secure funding more than a year after getting the contract.

The parastatal in January this year said it expected talks with China Eximbank for a US$1,1 billion loan, which started in October last year, to drag into the last quarter of the year.

Funding for the project was among the nine major agreements signed by President Robert Mugabe when he visited China in August year.

“The construction of Hwange 7 and 8 is awaiting financial closure (but) pre-commencement work is underway,” ZETDC commercial director Ralph Katsande told The Source last week.

In addition to Hwange, Sino Hydro is also undertaking the expansion of Kariba South Power Station to add 300 megawatts to its the current output of 750 MW at a cost of $355 million, also funded through a China Exim Bank loan.

Katsande said tenders for the US$30 million Gairezi hydro power station on the Gairezi River in Nyanga, which will produce 30MW, have been closed with construction expected to be complete in three and half years.

The completion of the power projects in 2018 is expected to plug a huge energy deficit due to limited investment in the capital intensive energy sector and ease the rolling power cuts that have hit hard on agriculture, manufacturing and mining sectors.

Zimbabwe requires about 2 200 megawatts daily, but currently generates only 1 300MW, while imports are not enough to meet demand.

Meanwhile, theft and vandalism of equipment is costing the power utility dearly which is facing costs of US$50 million annually to repair and replace equipment.

“Over 1,500 distribution transmitters are damaged and over 5,000 kilometres of conductors stolen (annually on average),” said Katsande.

The power company is owed over US$1 billion by creditors. -The Source