ZESA seeks US$400m from Chinese bank
by Own Correspondent Tuesday 29 June 2010
CAHORA BASSA . . . Zimbabwe is importing 150MW from Mozambican hydro power plant
- HARARE — Zimbabwean energy utility, Zimbabwe Electricity Supply Authority (ZESA) Holdings, on Monday said negotiations were still underway with a Chinese bank to provide US$400 million to boost power generation in the southern African country.
- ZESA chief executive Ben Rafemoyo said the money would be used to expand power output at the Kariba hydro plant on the Zambezi River by an additional 300 megawatts (MW).
- “It’s money we expect from one financier,” the ZESA chief executive officer said, adding; “As of now none of that money has been raised, ideally you need one financier to raise that kind of money.”
- The expansion, to be funded by the Export and Import Bank (EXIMBANK) of China, would bring the station’s electricity generating capacity to over 1 000MW.
- In May, government signed a memorandum of understanding (MoU) with EXIMBANK to finance the project.
- EXIMBANK would soon avail the resources to Sino Hydro, the firm which was contracted to undertake the expansion exercise, according to Rafemoyo.
- “WE expect that within the next six months all issues relating to the agreement with Sino Hydro will be completed,” he said.
- The ZESA boss said while the extra 300MW would significantly lessen power shortages in the country, it would not eliminate them entirely.
- Zimbabwe’s total requirement stands at 2 000MW, but the country is currently generating around 1 100MW.
- Zimbabwe is importing 150MW from Mozambique, and another 125MW from Zambia in a bid to ease power shortages.
- ZESA’s inability over the years to boost generation capacity at its ageing power stations and a critical shortage of foreign currency to import adequate electricity from neighbouring countries has left Zimbabwe grappling with severe power shortages.
- The wholly government-owned energy firm says cash-rich foreign investors remain reluctant to provide funding badly needed to boost power generation because of uncertainty about the country’s future political and economic direction.
- A coalition government formed by President Robert Mugabe, Prime Minister Morgan Tsvangirai and deputy Premier Arthur Mutambara last year has brought a degree of stability to Zimbabwe’s political situation but the future remains uncertain.
- Incessant squabbling between Mugabe and Tsvangirai has left political analysts wondering about the Harare coalition government’s long-term viability while most potential investors appear to have adopted a wait and see attitude before they can consider making any significant investments in the country. – ZimOnline