Zimbabwe, China in $400 mln power plant deal
Mon May 3, 2010 3:31pm GMT
HARARE (Reuters) – Zimbabwe has signed a $400 million agreement with China’s
Sinohydro to expand its Kariba hydro electricity plant at a time when
rolling power cuts are threatening to dim the country’s economic recovery
prospects.
Noah Gwariro, the managing director of the Zimbabwe Power Company — the
generation arm of state utility ZESA — said on Monday Sinohydro would add
two 150 megawatt units at Kariba.
“China’s Eximbank will fund the project to the tune of $400 million.
Sinohydro is already working on a similar project on the Zambian side of
Kariba,” he told Reuters.
Gwariro earlier told parliament Zimbabwe was generating a total of 940 MW —
less than half its national power requirements — from its Hwange thermal
plant and Kariba, against the country’s peak demand of 2,500 MW.
Zimbabwe has previously signed hundreds of millions of dollars worth in
cooperation agreements with foreign governments to boost its electricity
generation capacity, but has not made progress in getting any of the
projects off the ground.
In July 2005, Zimbabwe signed a $200 million deal with Iran’s Farab Company
for the extension of the Kariba South power station, but the deal fell
through after Zimbabwe failed to raise the required deposit for the loan.
A raft of deals with China totalling $1.3 billion for the building of new
coal mines and three thermal stations, signed in 2006, have also not yielded
results.
Gwariro said a shortage of funding meant only two of six units were running
at Hwange, which was hit by a complete power failure in February but the
station — whose capacity is to generate 750 MW — should generate 560 MW by
the end of May.
After years of hyperinflation and contraction, Zimbabwe’s economy has
stabilised under a power-sharing government formed last year by President
Robert Mugabe and his rival, Prime Minister Morgan Tsvangirai.
But power shortages threaten a full recovery of the economy as the key
mining and manufacturing sectors, which require reliable power supplies,
continue to experience frequent cuts.
Zimbabwe imports power from Mozambique and Zambia, but plans to export 40 MW
to Botswana under an $8 million deal under which its western neighbour will
finance the upgrading of a thermal station to produce 90 MW in Zimbabwe’s
city of Bulawayo.
Zimbabwe expects to start exporting power to Botswana in August, Gwariro
said.