Harare Power Station

THE Harare Power Station re-powering project is hanging in the balance amid indications that the Indian Export-Import Bank (Eximbank) is reluctant to guarantee the required financial backing.
Two years ago, Jaguar Overseas of India, was awarded the engineering, procurement and construction contract by the Zimbabwe Power Company (ZPC) — a power generation unit owned by ZESA Holdings — to re-power the Harare Power Station by replacing the old plant with a modern one with more capacity and improved efficiency.
It approached Eximbank for US$70 million financial support, but has been struggling to secure that funding for the project.
Impeccable sources at ZPC, told the Financial Gazette’s Companies & Markets (C&M)last week that the Indian bank is continuously asking for more information, a situation that seem to suggest that the institution is not interested in funding the project.
“I would say it’s almost two years (since we submitted our request) but Eximbank of India is continuously asking for more information and we now don’t know when the funds will be availed to enable the commencement of the project,” a source from ZPC told C&M.
Efforts by this newspaper to get a comment from ZPC managing director, Noah Gwariro, were not successful by the time of going to print as he was said to be away on business.
Energy and Power Development Minister, Samuel Undenge and his permanent secretary, Partson Mbiriri, were also not available to comment on the issue.
The re-powering project would see the replacement of the current boiler technology with a circulated fluidised bed, which is more efficient and cost effective.
This will grow the plant’s generation capacity to 120 megawatts (MW) from the current 30MW.
Surprisingly, Jaguar, which is in a quandary over the issue of funding the Harare Power Station project, has also been awarded the tender to re-power Munyati Power Station.
The project at Munyati will see the replacement of 15 existing boilers, overhaul of cooling towers and water treatment plant, refurbishment of two 50MW steam turbines and carrying out civil works.
The outdated power plant it intends to repower is currently generating about 20MW on average, but Munyati Power Station will have its electricity generation capacity restored to 100MW.
Government has also secured US$87 million from the Government of India to re-power Bulawayo Power Station.
The loan will be repaid in 13 years at an interest rate of two percent per annum.
But the refurbishment of the 120MW Bulawayo Power Station, which should have commenced early this year, has been deferred to later this year after parties to the transaction agreed to float a tender for the project in India, instead of Zimbabwe.
Zimbabwe faces a critical power shortage with generation averaging just below 1000MW and this has been unable to meet the country’s demand of about 1 600MW.
To cover for the shortfall, the power utility, ZESA Holdings, is importing about 300MW of electricity from Eskom of South Africa and 100MW from Hydro Cahora Bassa of Mozambique.
However, government, through ZPC, is working to close the electricity supply gap in the country through expansion projects at Kariba South Hydro Power Station and Hwange Thermal Power Station.
A Chinese contractor, Sino Hydro Corporation, is undertaking expansion work at Kariba Hydro Power Station, which is expected to add 300MW to the country’s existing power generation capacity.
The expansion work at Kariba Hydro Power Station is expected to be complete by 2018 after the government and China Eximbank signed a US$355 million loan agreement for the expansion of the plant.
Expansion of Hwange Thermal Power Station, the largest coal-fired power station in the country, will also be undertaken by Sino Hydro Corporation.
The expansion will see the thermal power station adding two more units with a combined generation capacity of 600MW.
Zimbabwe is also pursuing other projects to harness power from solar and the US$4,5 billion Batoka Gorge project along the Zambezi River, some 54 kilometres downstream of Victoria Falls.
The multi-billion dollar hydro power project, which is being driven by the Zambezi River Authority, a company owned by the Zimbabwean and Zambian governments, is expected to generate 2 400MW of electricity to be shared equally by the two countries.
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