Hwange Thermal Power Plant

WE welcome the anticipated release of $1,1 billion early next month by Chinese financial institutions for the expansion of Hwange Thermal Power Station as it will go a long way in easing the current power shortages. We reported yesterday that the first tranche from mega deals signed by President Robert Mugabe and his Chinese counterpart Xi Jinping during his State visit to China in August last year, will be ready next month allowing the expansion of the HPS, being carried out by Chinese firm Sinohydro, to start in earnest.

When completed, the $1,1 billion project will add 600 megawatts to the national grid — a major milestone as the country currently generates under 1,300MW against a peak national demand of 2,200MW. The envisaged release of the $1,1 billion for Hwange represents a major step forward for power generation and will see HPS, the country’s oldest coal-powered station producing about 650MW, almost doubling its capacity.

The government awarded Sino Hydro Corporation the tender to refurbish the power station 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 refurbishment of Hwange is expected to be completed in 2018 alongside the expansion of Kariba South power station which will add 300MW to its the current output of 750MW at a cost of $355 million.

Both projects are being funded by China’s Eximbank.

Other private power producers are at different stages of implementing their projects and from 2016 when at least some of them are complete, Zimbabwe can expect a reduction in load shedding. This is certainly good news for the country and we applaud the Chinese for sticking to the terms of their deal and agreeing to release the money for the commencement of refurbishment works at Hwange.

The combined 900MW expected after the completion of Kariba South and Hwang projects will put Zimbabwe in a position where it might not only meet its domestic power demands but could see it export power to its neighbours.

In the interim, we urge independent power producers contracted by the government to expedite the implementation of their projects so that they assist in ameliorating the current power shortages ahead of the completion of the major works at Kariba and Hwange. The release of the money for Hwange will confound critics who slated the country’s mega deals with China.

Finance and Economic Development Minister Patrick Chinamasa and Energy and Power Development Deputy Minister Tsitsi Muzenda confirmed as much when they told legislators attending a pre-budget seminar in Victoria Falls on Monday that the power deficit affecting the country would be a thing of the past in the near future.

“We have been working on Hwange 7 and 8 and it will add 600 megawatts into the national grid,” said Minister Chinamasa. “We are looking at $1,1 billion to do it and we should get the money for that in early December from Chinese financial institutions. Financial closure will be done in December.”

Deputy Minister Muzenda told the MPs that the government was also implementing a number of projects that would address power problems bedevilling the country.

“To date, as of September 30, 2015, 33 percent of work (at Kariba South) has been completed,” she said. “Pre-work at Hwange 7 and 8 has been done. I’m also pleased to say that the financial closure of this project is going to be signed by December. We have also to date awarded 300MW solar plants to three companies.”

During the same seminar, Mines and Mining Development Minister Walter Chidhakwa told the legislators that government was in discussion with South Africa on the importation of about 300MW that will exclusively be for the mining industry.

He said the power shortages being experienced have seriously hampered mining operations, affecting efforts to turnaround the economy.

“We recognise that if we do not sort out power and lose eight hours of power in the mines everyday, all the companies will go on care and maintenance,” said Minister Chidhakwa.

“We can’t afford to do that. We have approached the South Africans. We have opened discussions and yesterday, I was briefed that we are very close to arriving at an agreement for an approximately 300 megawatts, which we will send to the mines.”

He said mines would pay eight cents per kWh for the electricity from South Africa, compared to 13 cents per kWh which they are paying to Zesa Holdings. This is certainly a step in the right direction considering that some mines were considering shutting down due to the 25 percent reduction in electricity supply from Zesa.

We commend the government for being proactive and responding to the concerns of the mining industry which is crucial for the country’s economic revival efforts.