Sino Hydro secures US$1,2bn for Hwange Power Station
SINO Hydro Corporation, a Chinese contractor that won the right to expand the country’s largest coal-fired power plant, Hwange Power Station, has achieved financial closure and secured US$1,2 billion required for the power project.
The financial agreement for a long-term loan from China Export Import Bank (Eximbank), which has taken more than a year, is now expected to be signed this week.
Well placed government sources said the financial closure for the power project will be sealed when the Zimbabwean government and China Eximbank sign the loan agreement this week in Harare.
It is understood that the presidents of China Eximbank, Sino Hydro Corporation, will be in Harare on Tuesday accompanying the Chinese President, Xi Jinping, during his State visit.
“We expect the (Hwange Power Station expansion) loan agreement to be signed this week and work would start after ZPC meet the (loan) conditions that will be set by China Eximbank,” said a senior government source, who spoke on condition of anonymity.
Hwange Power Station expansion project would see the power station adding two more units to give a combined generation capacity of 600 megawatts (MW) by 2018, a development that would ease power outages.
The total cost for the project is estimated to be US$1,4 billion, and Eximbank is expected to bankroll the project to the tune of US$1,174 billion, while the Zimbabwe Power Company (ZPC) will provide the balance.
Last October, ZPC signed an engineering, procurement and construction contract with Chinese company Sino Hydro Corporation.
Sino was awarded the tender to add two units at the power station in June last year after another Chinese company, China Machinery and Engineering Company, failed to secure funding 14 months after getting the contract.
Sino Hydro was also contracted to expand Kariba South Power Station to add 300 megawatts (MW) of electricity to the national grid.
Expansion work at the power station kicked off in September last year.
Zimbabwe has been experiencing crippling power shortages, with national demand at peak periods estimated at 1 600 megawatts (MW), against available generation of about 1 000MW.
The country has been importing from regional power utilities to cover the shortfall, but this has also not been enough to meet demand.
Imports are currently only coming from Mozambique’s Hydro Cahora Bassa, which has been supplying a paltry 50MW but on a firm contract.
Electricity supply was expected to be one of the key drivers of government’s economic revival strategies under the Zimbabwe Agenda for Sustainable Socio-Economic Transformation. FinX
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