Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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$3bn Lusulu power plant construction expected to begin next year

$3bn Lusulu power plant construction expected to begin next year

THE construction of independent power producer, Pan-African Energy Resources (PER)’s proposed 2,000 MW Lusulu Coal Power Plant in Binga should commence in the first half of 2016 if the Zimbabwe Energy Regulatory Authority (Zera) approves the company’s proposedamendments to its generation licence.

The investor is seeking to have its licence amended after failing to initiate its proposed $3 billion project within the set timelines.

PER Lusulu Power was granted a generation licence in October 2010, with one of the key conditions of being given the licence being that the independent power producer should have commenced work on site within one year of receiving the licence.

However, since the issuance of the licence in the last quarter of 2010, the proposed 2,000 MW coal fired-power plant is yet to get off the ground.

Indications from the company are that it now finally wants to commence the process of establishing the power plant by submitting a Grid Impact Assessment study from the Zimbabwe Electricity Transmission and Distribution Company (ZETDC) by the end of October this year.

PER Lusulu Power has finally engaged investors willing to fund the project.

In December last year, Zera chief executive Gloria Magombo — while acknowledging the project had overrun the initial implementation plan by two years — noted some progress the company had achieved.

“A preliminary feasibility study report has been submitted and a new lead financier has been identified. The promoter has identified various contracting companies relevant to the project and MoUs have been signed,” said Magombo at the time.

In a statement last week Zera said it had “received an application for amendment of generation Licence number GC0016 issued on 26th October, 2010 to PER Group Ventures (Pvt) Ltd trading as PER Lusulu Power to construct, own, operate and maintain a 2,000MW thermal power station for the purpose of generation and supply of electricity in Zimbabwe. PER Lusulu is seeking to amend . . . conditions of the licence, which are linked to the implementation time frame of the project”.

The application for amendment of the licence by PER Lusulu is being done in terms of Section 49 (1) (b) of the Electricity Act (Chapter 13:19) of 2009.

In terms of the new conditions requested by the IPP, Phase I of the project (that is, construction of 500MW should begin 30 days after all the project and financing agreements have been signed and all the required conditions contained in them have been met, whose date has been provisionally fixed as March 31, 2016.

According to PER Lusulu — to the extent that the licence amendments are approved by Zera — the four phase construction project will now be expected to be completed and fully operational by the second half of 2021.

The PER Lusulu Power station, to be sited on the southern side of Lake Kariba, is within Binga’s Lusulu coalfields, with an estimated resource of 1.2 billion tonnes.

Earlier in March, Engineer Magombo told the Parliamentary Portfolio Committee on Mines and Energy larger IPPs — whose capital requirements are huge — were struggling to get off the ground.

She hastened to add that some IPPs had since approached Zera requesting for changes in the parameters of their licences due to “circumstances beyond their control”.

According to data provided by Zera, four mini-hydro projects by Nyangani Renewable Energy (Pvt) Ltd are currently operational, namely Duru, Pungwe A, Pungwe B and Nyamingura with total output of 21MW.

Other operational IPPs include Chisumbanje which currently supplies up to 4MW to the national grid, and Hippo Valley and Triangle Estates co-generation at a total 78MW. — BH24


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